Agenda and minutes

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 External Auditor.

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 2022. (Item 4 on the agenda filed with these minutes).

Mark Surridge representing the external auditors (Mazars), the Director of Finance, Governance and Contracts, the Head of Governance and Human Resources and the Head of Financial Services, attended the meeting to assist with the consideration of the item.

The Committee was advised that:

·         Within the audit there were four areas of responsibility:

o   Wider Powers: There had not been any reasons for to enact wider powers under the Local Audit and Accountability Act 2014.

o   Whole of Government Accounts (WGA): The external auditors had not yet received group instructions from the National Audit Office (NAO) in respect of their work on the Council’s WGA submission. They were unable to commence our work in this area until such instructions had been received.

o   Value for Money: A risk-based approach was to be carried out.  The majority of the work had been completed.  No significant weaknesses were anticipated.

o   Audit Opinion: The external auditors anticipated issuing an unqualified opinion, this was seen as desirable.

·         Regarding the status of the audit, it was not uncommon that there would be matters that were ongoing.  Aspects that were outstanding meant that the external auditors were unable to conclude their opinion by the 30^th November reporting deadline.

·         The net pension liability had been flagged as amber and the work completed on this had been reflected in the report.  The assurance letter from the pension fund auditor had not yet been received and as such uncertainty remained.

·         The final parts of the asset evaluations were being worked through.  There would be no impact on council tax and the general fund in cash terms, but it would require an adjustment to the accounts.

·         With regards to the revaluation of land and buildings, the figures were dependent on judgements and estimates and significant work was done on this.  A calculation exercise to quantify impact was being awaited and it was thought that there would be no impact on cash as an authority.

·         In regard to the extent of audit findings, the Council compared favourably to other authorities.

The Committee were advised in response to questions that:

·         Regarding adjusted misstatements, it would be reported where numbers had changed and must change.  The external auditors had not yet identified anything that required the numbers to change.  One piece around assets would change but would not be in the report until quantified and there would be a follow-up letter on this.

·         An error of £4k had been identified through the testing methodology which resulted in the larger extrapolated error projection (not every transaction was tested).  The external auditors were required to report this despite being considered immaterial and the fact that it had not changed did not prevent them offering an opinion.

·         A random sample was used so the same items might  ...  view the full minutes text for item 26.

A report of the Head of Governance and Human Resources.

A report of the Head of Governance and Human Resources was submitted presenting the Annual Governance Statement (AGS) 2021/22 for approval and reporting the results of the annual review of the Council’s Code of Corporate Governance. (Item 5 on the agenda filed with these minutes).

The Committee was advised that:

·         The report was a significant source of assurance.

·         It was difficult to compare the report with those of other authorities as they appeared in many different formats with some more detailed than others.

·         The Chartered Institute of Public Finance & Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) issued joint updated guidance on how the report should be presented and the Head of Governance and HR had produced a meaningful but brief communication accordingly.

·         A table of key responsibilities had been added to the report.

·         Information on arrangements for dealing with Freedom of Information requests had been added to the report.

·         A specific reference to fraud with regards to a supplement on whistleblowing, corruption and misuse of power had not been included.  This could be added following the meeting.

The Committee were advised in response to questions that:

·         The Code of Conduct for officers was in the constitution.  It was mainly an internal disciplinary procedure whereas the Code of Conduct for elected members was more public.

·         There was a typographical error in the report.  Where it was stated that “There is a process in place to deal with complaints that members many have breached the Code of Conduct”, ‘many’ should read ‘may’.

·         A reference to officers could be included in the report with regards to the Code of Conduct.

·         The Code of Corporate Governance was distinct from the Annual Governance Statement.

The updated Code of Corporate Governance reflecting the amendments made above and in the resolution is attached to these minutes and would be uploaded to the Council website.

RESOLVED

1.    that the Annual Governance Statement be approved with an amendment to include a specific reference to fraud with regard to whistleblowing on corruption and misuse of power and the inclusion of a reference to officers with regards to the Code of Conduct.   

2.    that the updated Code of Corporate Governance be approved.

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 for the Committee Council’s Statement of Accounts 2021/22 for approval for publication. (Item 6 on the agenda filed with these minutes).

The Director of Finance, Governance and Contracts, the Head of Financial Services, the Head of Governance and HR and the External Auditor attended the meeting to assist the committee with the discussion of this item.

The Committee were advised that:

·         The report highlighted major changes to the way accounts were compiled.

·         It had been recommended by the external auditors that it was necessary to demonstrate that the council had an independent check on floor areas within the properties on portfolio.  As internal records could not be relied upon, Reading’s had been appointed as independent valuers to carry out values of 20 properties in order to compare them independently to property records.  On receipt of the information, it was noticed that in one particular property (Brown’s Lane Leisure Centre) floor space had decreased in a material way.  Possible explanations for this were that it could have included a car park or that the downstairs could have been bigger than the upstairs.  Further work was undertaken through the land registry, and it was ascertained that their records were correct and not the property records.  As such, the new floor areas were fed into the asset system.

·         Work for 2020/21 had been undertaken and had been highlighted in the report.

·         The final piece of work with the finance team was to restate the 2020/21 accounts. As such an exercise was being undertaken to provide the external auditors with further working papers.  When this was finalised the 2020/21 accounts would be correctly adjusted.  As such the committee could be assured that the financial system was up to date.

·         It was not anticipated that there would be any further adjustments to accounts.

The Chair remarked that it was good to see that the comments from the previous Audit Accounts Committee had been taken into account.

The Committee were advised in response to questions that:

·         In terms of the commercialisation reserve, commercial properties had been purchased and as part of this the Council were aware that there were renewal dates for rental properties.  Therefore, if a tenancy was not renewed then a reserve was needed to cover this potential loss.  In the last financial year the Council had increased this reserve in line with the planned amount.

·         The Section 106 monies were not a one-off.  It was necessary to check whether this had grown significantly from the previous year.

·         With regards to concerns raised about the budget for Planning and Regeneration potentially being confused with Loughborough Town Deal money, the Head of Financial Services clarified that these monies were under the Planning and Regeneration heading because the officer appointed to manage the Town Deal was in the Planning and Regeneration department.  The Town Deal funds were audited through the external auditors and split into Council Capital Plans schemes which were ringfenced and monies purely for  ...  view the full minutes text for item 28.