Agenda and minutes

The Committee is asked to confirm as a correct record the minutes of the meeting of the Committee held on 12^th July 2022.

The minutes of the meeting of the Committee held on 12^th July 2022 were confirmed as a correct record and signed.

For information, disclosable pecuniary interests and registrable interests relate to entries that are included, or should be included,  on a councillor’s register of interests. Non-registrable interests relate to any other matters.

No disclosures were made.

No questions were submitted.

No questions had been submitted.

A report of the Director of Finance, Governance and Contracts.

A report of the  Director of Finance, Governance and Contracts was submitted providing the Committee with a summary of the Council’s use of RIPA powers. (Item 5 on the agenda filed with these minutes).

The Head of Governance and Human Resources attended the meeting to assist the Committee with the consideration of this item.

In response to a query over whether the Council should be making more use of RIPA powers, the Head of Governance and Human Resources informed the Committee that the use of RIPA powers needed to concern an offence that would result in a custodial sentence of six months or more and such cases were few and far between.

RESOLVED that the Committee note that there has been no use of RIPA powers by the Council for the period from 1 July 2022 to 30 September 2022.

Reason

To enable the Committee to comply with the request from Cabinet that the Audit Committee assumes responsibility for receiving a quarterly report on the use of RIPA, and to report to Cabinet any concerns arising from those reports that may indicate that the use of RIPA is not consistent with the Policy or that the Policy may not be fit for purpose.

A report of the Head of Finance.

The Head of Financial Services submitted a report reviewing the Treasury

Management Strategy and the Annual Investment Strategy, plus the various

Prudential Borrowing and Treasury Indicators for the first six months of 2022/23. (Item 6 on the agenda filed with these minutes).

The Director of Finance, Governance and Contracts attended the meeting remotely to assist with the consideration of this item.

The Director of Housing and Wellbeing attended the meeting remotely to assist with the consideration of this item.

The Head of Financial Services attended the meeting remotely to assist the Committee with the consideration of this item and informed them as follows:

·         The report would go to Cabinet on 17^th November and Council on 23^rd January.

·         The General Fund budget was set at £41m which was a high figure.  This included £28m of the Enterprise Zone and Regeneration budget which was a place marker in the plan and as such the report was not completely monitoring against this number.

·         The spend was very low at £2m which left an underspend of £11million.

·         The budget figure included the slippage of the last Capital Plan.

·         Of the approximately £12m in the Housing Revenue Account (HRA) budget, approximately £700k had been spent.  This showed a large underspend.

·         Regarding the Capital Plan, new contracts were being procured and put in place.

·         Underspends from the HRA would go back into the HRA Financing Fund.

·         The current Capital Programme was fully funded.  There was internal borrowing which had held up and continued to support capital borrowing.

·         The internal Investment Balance was £54m.  The Council had been able to invest this money and obtain a good rate of return.

·         The budget had outperformed at the half-year stage.

·         There had been a net return of 1.4% on the External property Funds of £5m.

·         The Total interest earned was £402k.  This was up on the budget and Treasury Management interest rates going forward into the 2023/24 as interest rates were favourable.

Summary of Discussion:

·         Regarding the HRA underspend, a review was carried out at the end of the financial year and advice was sought from the director of service.  Money not spent could be moved forward, however, it was preferable to perform on budgets rather than move them forward. 

·         The Director of Housing and Wellbeing added that in terms of delivery on the HRA budget, a contract had been entered into with J. Tomlinson on Kitchens and Bathrooms.  The full programme was not deliverable in a single quarter.  It was necessary to set an achievable amount of work for the contractor over the course of the year.

·         The Director of Finance, Governance and Contracts stated that whilst inflation was a concern, the increase in interest rates was good news for the Council due to the amount of cash the Council had.  However whilst revenues would increase, costs would also increase.  Such increasing costs included payroll with the 2022/23 pay increase and the Environmental Services Contract which had increased based on the RPI index.  He added that  ...  view the full minutes text for item 20.

A report of the Director of Finance, Governance and Contracts.

A Report of the Director of Finance, Governance and Contracts was submitted summarising the progress against the 2022/23 Audit Plan, outlining key findings from final reports and any outstanding recommendations.  (Item 7 on the agenda filed with these minutes).

The Director of Housing and Wellbeing attended the meeting remotely to assist the Committee with the consideration of this item.

The Audit Manager attended the meeting remotely to assist the Committee with the consideration of this item and informed them as follows:

·         There had been good progress in the second quarter of the financial year and two final reports had been issued.

·         Housing repairs had limited assurance.

·         DFG and Defra grants had been reviewed and signed off.

·         Benefits subsidy work had been completed.

·         The 2022/23 plan was progressing well and key financial audits were in progress.

·         No recommendations were overdue.

·         Only minor amendments had been made to the Internal Audit Charter.  These concerned changes in job titles.

The Committee were advised in response to questions that:

·         Housing repairs processes were driven through the system.  Procedures were in place but needed updating.  The system was linear and when a repair was logged it went into the system and was categorised and allocated.  The Repairs and Investments Manager had had been asked to update the system, however this would be on a long timescale due to existing commitments.

·         Some items from the 2017 audit were still present.  Repairs completed were tracked and performance was reported on.   Repairs not completed were being considered in more depth.  Some issues, such as procurement of windows, were known and being worked on.

·         Previously when repairs audits had been carried out they had been minimal, this one was more detailed as it looked at the whole process rather than solely the financial side.  As such there would be more recommendations.

·         The housing repairs team had a significant part of the budget (£1.9m) and issues on assurance had been identified, however, this did not mean that action was not being taken. 

·         Risks around financial loss were associated with disrepair claims.  There were also risks surrounding duplicate payments to contractors.  It was recognised that some issues did not have a material financial loss.  Costs were benchmarked so there were measures of efficiency and checks.

·         Regarding the schedule of rates being incorrect it was noted that this was an issue with the system rather than something with financial implications to the Council.

·         The Director of Housing and Wellbeing noted that he recognised that there were improvements to make and that they would be made.  He also noted that whilst there was potential for material loss, this had not been identified during this audit report, although there were losses present in respect of disrepair claims.

·         Controls across the whole area were looked at and the audits were split across quarters so that they could be considered in more depth.  The next audit would include responsive repairs and voids.  If controls were not in place then financial losses were possible.  As such the  ...  view the full minutes text for item 21.

A report of the Head of Transformation, Strategy and Performance.

A report of the Head of Transformation, Strategy and Performance was submitted providing the Committee with details of the Strategic Risk Register produced for the period to 2022/23. (Item 8 on the agenda filed with these minutes).

Head of Transformation, Strategy and Performance attended the meeting to assist the Committee with the consideration of this item and informed them as follows:

·         The register was managed by officers in SLT and the Corporate Leadership Team (CLT).  The group had met on 21^st September and this report reflected changes made at that meeting.

·         As had been requested at the last meeting of the Audit Committee, the current report outlined where changes had been made so that changes were easy to identify.

·         Strategic Risk 3 – Financial Resources had increased its score as it was recognised that the financial situation was volatile.  Particular risks had been identified concerning revenue from the Town Hall and Car Parks.

·         Strategic Risk 7 – Data Security had decreased due to more robust treatments and controls.  Additionally, the post of Data Protection Officer had now been filled.

·         Regarding Strategic Risk 11, there was a new risk regarding housing demand.  It was recognised that there was a demand on properties for a number of reasons including surrounding refugees and asylum seekers (including those resulting from the war in Ukraine).  The situation would be monitored.

·         Risks were being monitored through the Pentana program which showed the direction of travel of risks.

The Committee were advised in response to questions that:

·         Following a query on SR 7 appearing to change from 6 to 6.  The Head of Transformation, Strategy and Performance stated that she would check this and clarify.

·         The risk of cyber-attacks had been discussed by the risk management group.  The Council had cybersecurity insurance and awareness of the issue was being raised.   The risk of cyber-attacks on elections was not discussed specifically and it was not seen as a major risk.  Such a risk to elections would more likely come via influences in social media.  The risk of criminal attacks (e.g. via ransomware) was recognised.

·         The report was annotated and updated after each meeting.  The direction of travel of risks did not appear to change significantly.

·         The Head of Transformation, Strategy and Performance would make the action plan for re-let of HRA property available to the Committee.

RESOLVED that the Committee note the report.

Reason

To ensure the Committee is kept informed of progress against the Strategic Risks. Noting that should they occur they would cause the Council to be unable to operate and/or provide key services leading to a significant effect on public wellbeing.

A report of the Director of Finance, Governance and Contracts.

A report of the Head of Strategic Support was submitted to enable the Committee to consider its work programme. (Item 9 on the agenda filed with these minutes).

It was noted that a national procurement for external auditors had taken place and that Azets would become the new external auditors once Mazars had completed their work.

RESOLVED

1.    that the Committee proceeds on the basis of the work programme attached to the agenda.

2.    that the issue of Capital Programme performance and underspend be considered by the Scrutiny Committee.