Agenda and minutes

This virtual meeting is to be webcast. Members are reminded of the need to unmute before speaking. The Chairman will read the following announcement:

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

Please could I also remind Members of the Public who have registered to speak that they will be admitted to the meeting at the appropriate time.

Please also be aware that if technical difficulties interrupt the meeting that cannot be overcome, I may need to adjourn the meeting.”

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 pursuant to the Council’s Member Code of Conduct.

To confirm the minutes of the meeting of the Committee held on 28 September 2020.

            RESOLVED:

That the minutes of the meeting held on 28 September 2020 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 meeting which warranted further discussion.

(Chief Internal Auditor) To consider the attached work programme for the Committee for 2020/21.

The Chairman advised that the date shown as 23 November 2020 should read 9 December 2020 .

The Committee noted the Work Programme

(Chief Internal Auditor) To consider the attached report summarising the work of Internal Audit and Corporate Fraud for the period September to November 2020.

The Chief Internal Auditor, Sarah Marsh, presented the Internal Audit Monitoring Report, September to November 2020. She advised that progress had been made against the approved audit plan, and that specialist services had been brought in to assist with completion of the audit plan at no additional cost. The Active Directory Management audit has been finalised since the last Committee meeting in September, with moderate assurance. This was a technical audit carried out by IT specialist and related to the  directory services developed by Microsoft  for the administration of all PCs and servers on a windows domain; additional work is required on passwords, dormant accounts, security logs and servers, the IT department were addressing the recommendations. Cllr Hadley asked for the target date for the completion of the work by the IT department on the active directory to be provided.

The Recommendation Tracker showed three outstanding recommendations. Assurance was provided that the two outstanding health and safety recommendations were being actively worked on; additional support had been brought in for the Health and Safety Officer; a strategy and operational group had been set up; priority was being given to the completion of Health & Safety risk assessments; and a new system for staff to report accidents and near misses was due for implementation with improved training and awareness. A policy for Asbestos Management was approved by Cabinet on 3 Dec 2020, in line with the third recommendation on the tracker

S Marsh advised that Internal Audit had worked with the Corporate Fraud Team on processing and identifying potential fraud in relation to grants and provided support to the Finance Department. The corporate fraud team have continued to vet all right to buy though zoom and have worked with housing in relation to succession applications.

Resolved:

(1) That the summary of the work undertaken by the Internal Audit Team and the Corporate Fraud Team during the period October to November 2020 be noted.

(Chief Internal Auditor) To consider the review of the terms of reference and the effectiveness of the Audit and Governance Committee.

The Head of Internal Audit, S Marsh, reported that in line with good practice the Audit and Governance Committee reviewed its terms of reference and effectiveness on an annual basis, in line with the Chartered Institute of Public Finance and Accountancy (CIPFA) model and other Councils. No change of reference was proposed.

The Terms of Reference for the Committee detailed the requirement for co-opted members. Tony Jarvis had joined the Committee; a further recruitment exercise would be carried out in the new year.

The Audit and Governance Committee had demonstrated compliance with recommended best practice for an effective audit committee, in line with the CIPFA checklist. The skills and knowledge aspect would be reported at the next meeting.

The Chairman highlighted that this Committee was responsible for the appointment of the external auditors.

Cllr Heap questioned the remit of the Committee in relation to Quails and the potential to look at documentation used for decision making as the sole shareholder. The Section 151 Officer, A Small, detailed that all governance issues fell under the remit of the Audit and Governance Committee, as such the Committee would be responsible for the governance mechanisms. The actions and performance of Quails would fit into the remit of Overview and Scrutiny Committee, who would be able to see commercial documentation. It was noted that the delineation between the boundary of commercial sensitivity and information the Council needed to be clear.

Resolved

(1)            That no changes are required to the Committee’s Terms of Reference,

(2)            The results of the review of effectiveness of the Committee be noted; and

(3)            That the progress made against the audit action plan be noted.

(Section 151 Officer) To consider the attached report and review the corporate risk register for any new or emerging risks.

The Section 151 Officer, A Small, presented a report on Risk Management, the risk register and risks the Council are facing He detailed the main changes to the corporate risk register since the last committee. The risk for economic development had been reduced due to a number of actions that would bolster the local economy and two risks have been removed as standalone risks; the staff travel plan risk has been subsumed within the accommodation project and the Qualis risk integrated as part of financial risk for the Council

Tony Jarvis commended the officers for the clarity of the report, analysis and actions.

Cllr Heap challenged the risk rating of the climate emergency as B2 and suggested this should be A1, as climate change was occurring and impacted upon everything that the Council did. He detailed consequences and actions that could be carried out at a local, national and global level and stressed the importance of immediate mitigation.  The significance of the climate emergency at a global level was acknowledged by the Committee and discussion ensued on the role of the committee in relation to this risk.  The Section 151 Officer advised that the risk register related to the actions taken by the Council in relation to that risk and if there were suitable plans in place to address the risk at a local level and for their sphere of influence. Cllr Phillips reminded the Committee that the Council had declared a Climate Emergency and that budget allocation had been made to allow the plans to be developed.  The Committee requested a report for a future meeting, on the climate emergency action plan from a governance perspective, that would allow them to determine if the risk rating needed to be reviewed and if required what the risk level should be.

The Chairman raised the issue of delays to the inspection of the local plan, Cllr Philip explained that the inspectors schedule has limited latitude, a slot was missed due to Covid, but progress was anticipated.

Resolved

(1)  The changes in the risk register were noted and endorsed;

(2)  That the Officer Risk Management Group be requested to consider any reputational risk associated with Qualis; and

(3)   That a report be presented at a future meeting, on the climate emergency action plan from a governance perspective, that would enable the Committee to determine if the risk rating needed to be reviewed.

(Section 151 Officer) To consider the Council’s Treasury Management Mid-Year Report 2020/21.

The Interim Head of Finance, Christ Hartgrove, presented the Treasury Management Mid-Year Update 2020/21 which outlined the borrowing and investment activity for the year to date and detailed how the Council performed against the relevant treasury management indicators.

During the period April to September 2020 borrowing had increased by £16.0million to £240.5million with a reduction in investments of £20.9 million to £1.2 million. Analysis of the non-treasury investments and the commercial property portfolio showed a balance sheet value of £138 million at the start of the financial year and £3.7 million net income for the for the first six month, this reflected the accrued position, there had been no write-offs against this income to date, however bad debt provision had been made in light of the COVID pandemic.

The Treasury Management indicators had been met, in the main, however, several factors in an exceptional year including: high balance at year end; funding for Qaulis; and unexpected Government advanced funded business support for COVID had created an unprecedented cash flow, this had now stabilised.

The Chairman question the yield on commercial property portfolio and was advised that this was based on the balance sheet position which for older acquisitions would not be accurate and the reason percentage returns were not included.

Cllr Heap asked if monies borrowed would be repaid, Cllr Philip advised that of the Housing Revenue Account (HRA) repayments had been requested at the Council Housebuilding Cabinet Committee (8 Dec 2020) and these details should be available soon. The Sec 151 Officer detailed that this related to a refinancing event and treasury management advice will be taken to determine if debt is partial of fully refinanced. 

Resolved:

(1)  The Treasury Management Mid-Year Update 2020/21 was noted and recommended for comment to full Council.

(2)  The Minimum Revenue Provision Statement (MRP) 2020/21 was recommended to Council for approval.

(Section 151 Officer). To provide details of the progress made in the preparation of the Statutory Statement of Accounts 2019/20 and the status of the Annual Audit Letter (report to follow).

The Section 151 Officer outlined the annual audit and statement of accounts 2019/20 could not to be presented to the Committee and advised that officers had completed and improved the processes to ensure that the accounts were in a fit state for audit, the delay was due to the external auditor’s inability to meet the deadlines due to capacity issues and COVID impact on finance teams.  The Committee emphasised the requirement  to present the audit and accounts at the next Committee meeting.

Resolved:

(1)  Finalised Annual Audit and Statement of Accounts 2019/20 to be present at the next Committee meeting.

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.

The position of Vice-Chairman of the Audit & Governance Committee has arisen through the casual vacancies of co-opted members of this Committee. Under Article 11, paragraphs 13 – 17, of the Constitution, Members serving on the Committee are eligible for appointment to either role; however, if the Chairman is a Councillor then the Vice Chairman must be a Co-Opted Member, and vice versa.

This item seeks to agree the appointment. of Mr Tony Jarvis, the Co-Opted Member, as the Vice Chair of the Audit and Governance Committee.

Recommendation:

(1)              That the Committee make an appointment to the position of Vice Chairman of the Audit & Governance Committee for the remainder of the 2020/21 municipal year.

The Chairman addressed the vacancy of Vice Chairman and advised the Committee that if the Chairman of the Committee was a Councillor then the Vice Chairman must be a Co-Opted Member, and vice versa. Tony Jarvis was nominated by Cllr Heap and seconded by Cllr Vaz and duly accepted the role of Vice Chair of the Committee.

Resolved:

(1)  That the Committee appointed Mr Tony Jarvis as the Vice Chair of the Audit and Governance Committee for the remainder of the 2020/21 municipal year.

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.

The Committee noted that there was no business which necessitated the exclusion of the public and press from the meeting.