Agenda and minutes

This meeting is to be webcast. The Chairman will read the following announcement:

“I would like to remind everyone present that this meeting will be broadcast live to the internet (or filmed) and will be capable of repeated viewing (or another use by third parties).

If you are seated in the lower public seating area then it is likely that the recording cameras will capture your image and this will result in the possibility that your image will become part of the broadcast.

This may infringe your human and data protection rights and if you wish to avoid this then you should move to the upper public gallery.

Could I please also remind Members to activate their microphones before speaking”.

The Chairman made a short address to remind everyone present that the meeting would be broadcast live to the internet, and would be capable of repeated viewing, which could infringe their human and data protection rights.

To declare interests in any item on the agenda for the meeting of the Committee.

There were no declarations of interest made pursuant to the Council’s Members’ Code of Conduct.

To confirm the minutes of the meeting of the Committee held on 29 Septemeber 2022.

          RESOLVED:

That the minutes of the meeting held on 29 September 2022 be taken as read and signed by the Chairman as a correct record.

To consider any matters arising from the minutes of the previous meeting of the Committee.

There were no matters arising from the minutes of the previous meetings which warranted further discussion.

To consider the attached work programme for the Committee for 2021/22.

Resolved:

The Committee noted its Work Programme for 2022/23.

(External Audit – Deloitte) To consider ISA 260 - Communication with those Charged with Governance.  -  REPORT TO FOLLOW.

The Strategic Director Corporate and Section 151 Officer, A Small, advised the Committee that the Draft ISO 260 report was the written conclusion of the auditors findings for the 2020/21 accounts. Whilst there were no major issues to report, there was a national issue in relation to the treatment of infrastructure assets, it was anticipated that there would only be minor amendments before the report was finalised.

Mo Ramzan, Deloitte, provided further detail on the report. He advised the Committee the report had been issued as a draft progress position. The audit was substantially complete. He confirmed that formal guidance was expected in relation of infrastructure assets, and this would be applied in to the financial statements. The Value for Money (VfM) work was completed and there were no matters to report. It was anticipated that an unqualified and unmodified audit opinion, with no significant matters to highlight would be given.  A final report would be issued and presented to the Committee in due course.

The Committee were advised that information relating to the subsidiary auditor would be included in a future report.

Resolved:

The Committee noted the draft report on the audit for the year ended 31 March 2021.

(Interim Chief Finance Officer) To consider and comment on the attached Treasury Management Mid-Year update 2022/23.

Interim Chief Financial Officer, C Hartgrove, presented the report, he highlighted the mid year position for the period April to September 2022:

·       The borrowing position had marginally decreased by £0.7 million, from £269.0 million to £268.3 million, compared to the same position for 2021/22.

·       There was a decrease in investments of £2.3 million, from £18.7 million to £16.4 million, with a wider spread of investment, compared to the same position for 2021/22.

·       Non treasury investments, from the commercial property investments received a total net income of £4.2m, compared to £3.768 million for the corresponding period in 2021/22. Income streams at North Weald Airfield had benefited due to the return of the Saturday Market following the disruption caused by the pandemic.

·       Three had been compliance with the Treasury Management indicators, except for a technical breach associated with the 50% upper limit of the maturation of loans between 15 and 20 years, which was at 58%. The Committee was advised that this was a legacy from the HRA self-financing regime and would be addressed in the forthcoming Treasury Management Strategy for 20223/24

The Committee queried the Council’s cashflow position, asked about the £54m of short-term borrowing that would expire within 120 days and challenged the efficacy of the interest rate indicator. C Hartgrove advised the income and outgoings could be in the regions of millions of pounds on a daily basis, that most of the  short term borrowing would need to be refinanced and options for short term borrowing could be considered,   and that the indicator was based on investments and borrowing that the Council currently had and all the borrowing was on fixed rate, exposure to investment was low, but that the indicator would be reviewed in the next Strategy

Resolved:

(1)        The Committee noted and recommended the Treasury Management Mid-Year Update 2022/23

(Sec 151 Officer) To consider and comment on the attached proposed change to the Minimum Revenue Account (MRP) Policy.

The Interim Chief Financial Officer, C Hartgrove, explained that the Minimum Revenue Provision (MRP) was a statutory requirement for councils to make a charge to its General Fund to provide for the repayment of past capital debt and other credit liabilities. The proposal present was to cane the method of calculation MRP from ‘Asset Life Straight Line‘ model  to the ‘Asset Life Annuity’ method, this was fully complaint with statutory guidance and would change from equal instalment over the life of the asset to  recognise the time, value of money and match the repayment profile to how the benefits of the asset are consumed over its useful life. This change would result in a lower revenue charge to the General Fund in the medium term.

The Committee challenged the change of approach, questioned the assurance of funds being set aside for this purpose, and raised concerns in relation to the long term future rates and forecasts for annuities and a potential issue in the future. C Hartgrove advised that there was a budget for MRP and as part of the year end accounting process a journal for the transfer to the capital finance reserve, would be made and this would be covered by the annual audit, The annuity rates were updated twice daily by the PWLB and this would be reflected and updated in calculations, and a full provision would be made over time, with annual adjustments if required. Andrew Small confirmed that adequate provision was being made and that the auditors would raise as issue to the Committee if there were any concerns.

It was noted that Cllr Owen did not support the change.

Resolved:

The Committee noted and recommended to for full Council the change to the Minimum Revenue Account (MRP) Policy with effect from 2023/24.

(Strategic Director Corporate and Section 151 Officer) To consider and comment on the risk management report.

The Strategic Director Corporate and Section 151 Officer, A. Small, introduced the risk report and highlighted that non-compliance with Health & Safety Regulations had been added to the risk register as the highest risk to the Council (A1), work to comply Building Safety Act 2022 and Fire Safety Act 2021 had commenced which should reduce the risk rating. The risk associated with Cyber security had also increased.

The Committee received confirmation that the new regulations applied to buildings for the Council’s own use and community use.

Resolved:

The Committee reviewed and endorsed the risk register

(Chief Internal Auditor) To consider and comment on the attached report.

The Senior Auditor, S Linsley, presented the Internal Audit Monitoring Report and updated the Committee on the work completed by internal audit since the previous meeting.  The ‘feeder systems and reconciliations’ audit had received limited assurance; the associated recommendations were being progressed. There were seven overdue items on the recommendation tracker, all of which were medium priority.

S Linsley introduced the Whistleblowing Policy and highlighted the minor revisions to the policy for safeguarding reporting and changes in contact details of staff. She advised the Committee that had been some minor changes around types of fraud in the updated Anti-Fraud and Corruption Strategy and that a review of the current Internal Audit Charter confirmed it was fit for purpose and fully compliant with the Public Sector Internal Audit Standards (PSIAS) and no changes were proposed.

The Code of Corporate Governance was a statement of the systems by which the Council directs and controls the exercise of its functions and how it relates to the local community, The review has confirmed the Code was still up to date, in line with good practice and fit for purpose. Minor changes had been made to remove references to Covid-19 as a result of the Council moving out of the reactive phase of the pandemic and into recovery.

An update on the work of the corporate fraud team and progress made against the issues identified in the Annual Governance Statement were detailed in the report.

The committee sought assurance on that all data would be transferred to the cloud, whilst technical detail could not be provided A Small advised that this would be built into project structure and processes.

Resolved:

The Committee:

•   noted the summary of the work of Internal Audit and the Corporate Fraud Team for the period September to November 2022

•   noted the revised Whistleblowing policy

•   approved and referred the revised Anti-Fraud and Corruption Strategy to full Council for approval

•   approved the revised Internal Audit Charter, and

•   approved the Code of Corporate Governance

Section 100B(4)(b) of the Local Government Act 1972 requires that the permission of the Chairman be obtained, after prior notice to the Chief Executive, before urgent business not specified in the agenda (including a supplementary agenda of which the statutory period of notice has been given) may be transacted.

No other business was raised for consideration by the Committee.

Exclusion:

To consider whether, under Section 100(A)(4) of the Local Government Act 1972, the public and press should be excluded from the meeting for the items of business set out below on grounds that they will involve the likely disclosure of exempt information as defined in the following paragraph(s) of Part 1 of Schedule 12A of the Act (as amended) or are confidential under Section 100(A)(2):

The Local Government (Access to Information) (Variation) Order 2006, which came into effect on 1 March 2006, requires the Council to consider whether maintaining the exemption listed above outweighs the potential public interest in disclosing the information. Any member who considers that this test should be applied to any currently exempted matter on this agenda should contact the proper officer at least 24 hours prior to the meeting.

Background Papers: 

Article 17 of the Constitution (Access to Information) define background papers as being documents relating to the subject matter of the report which in the Proper Officer's opinion:

(a)        disclose any facts or matters on which the report or an important part of the report is based;  and

(b)        have been relied on to a material extent in preparing the report and does not include published works or those which disclose exempt or confidential information and in respect of executive reports, the advice of any political advisor.

The Council will make available for public inspection one copy of each of the documents on the list of background papers for four years after the date of the meeting. Inspection of background papers can be arranged by contacting either the Responsible Officer or the Democratic Services Officer for the particular item.

            RESOLVED:

That, in accordance with Section 100(A)(4) of the Local Government Act 1972, the public and press be excluded from the meeting for the item of business set out below as it would involve the likely disclosure of exempt information as defined in the paragraphs of Part 1 of Schedule 12(A) of the Act indicated and the exemption is considered to outweigh the potential public interest in disclosing the information:

Agenda                                                                       Exempt Information

Item No           Subject                                               Paragraph Number

13                    Internal Audit Report -Cyber Security            3

(Chief Interanl Auditor) To consider the attached report.

Resolved:

The Committee noted the report.