Agenda and minutes

Audit & Governance Committee - Monday, 17th January, 2022 7.00 pm

Venue: Council Chamber - Civic Offices. View directions

Contact: Laura Kirman  Tel: 01992 564243 Email:  democraticservices@eppingforestdc.gov.uk

Media

Items
No. Item

33.

Webcasting Introduction

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”.

 

Additional documents:

Minutes:

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.

34.

Declarations of Interest

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

 

Additional documents:

Minutes:

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

 

35.

Minutes pdf icon PDF 148 KB

To confirm the minutes of the meeting of the Committee held on 22 November 2021.

 

Additional documents:

Minutes:

            RESOLVED:

 

That the minutes of the meeting held on 22 November 2021 be taken as read and signed by the Chairman as a correct record.

36.

Matters Arising

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

Additional documents:

Minutes:

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

 

37.

Audit & Governance Committee - Work Programme pdf icon PDF 119 KB

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

 

Additional documents:

Minutes:

The Committee noted its Work Programme for 2021/22

38.

Internal Audit Progress Report. pdf icon PDF 255 KB

(S Marsh) To consider and comment on the internal audit progress report (attached).

Additional documents:

Minutes:

The Chief Internal Auditor, S Marsh, presented the Internal Audit Monitoring Report which included an update on progress of the 2021/22 Plan. The priorities for the rest of the year were being assessed to determine whether the Plan could be completed. She advised the Committee that the audit of Procurement and Contracts had been given a moderated assurance. The Audit tracker showed there was a high number of overdue recommendations, although a successful IT disaster recovery exercise had been carried out in the preceding week. Internal Audit had continued to work across a range of business areas including: the corporate purchase card project, risk management, and providing checks and assurance for Covid 19 business grants. The Annual Governance Statement had been presented at a previous meeting and the report detailed progress on this. Discussions were ongoing with Harlow Council for a potential shared service for the Corporate Fraud Team to investigate tenancy fraud starting with right to buy applications.

The Committee received additional details on IT disaster recovery and confirmation that the Council was in an improved position, back up was on the cloud and core services could be prioritised in the event of a major failure.

Resolved

The Committee:

·                Noted the summary of the work of Internal Audit and the Corporate Fraud Team for the period November 2021 to January 2022

·                Agreed that no changes were required to the Local Code of Governance

·                Reviewed  the progress of actions taken to address issues identified in the 2020/21 Annual Governance Statement.

 

39.

Risk Management Report pdf icon PDF 230 KB

(A.  Small) To consider and comment on the risk management report (attached).

Additional documents:

Minutes:

The Section 151 Officer, A. Small, highlighted that there had been one material adjustment to the housing capital finance risk, which had decreased due to the review of the HRA business plan. There were two high risks: The Local Plan and Climate Change.

The Committee queried the measure of outcomes associated with economic development, Cllr Philip advised that measurements especially relating to footfall, were difficult and costly, and that the expectation of a financial contribution to the town centre management post from town and parish councils would be a good measure of value. 

Sarah Marsh detailed to the Committee that historically there had been low assurance around business continuity, this was addressed and systems had been put in place, but these would needed to be reviewed and streamlined.

Resolved

The Committee reviewed and endorsed the risk register and confirmed no new or emerging risks needed to be referred to the officer Risk Management Group.

 

40.

Treasury Management Strategy (including Investment Strategy) 2022/23 pdf icon PDF 173 KB

(A Small) To  consider the attached Treasury Management Strategy (including Investment Strategy) 2022/23 (attached).

 

 

Additional documents:

Minutes:

The Strategic Director Corporate and Section 151 Officer, A Small, set the context and the relationship between the Treasury Management Strategy, Capital Strategy and the Council’s budget. The Interim Chief Financial Officer, C Hartgrove introduced The Draft Treasury Management Strategy and Investment Strategy 2022/23 and advised the Committee that the overriding position for the year ahead was a further rise in borrowing activity as the Council continued to roll out its capital investment plans and very limited investment activity. As at 31 December 2021 the Council held £265.606m borrowing offset by £24.978m in Treasury Investments. The Council’s Capital Financing Requirement (CFR), which reflected the Councils underlying need to borrow, was rising to meet the needs of the Capital Programme, the estimated actual borrowing would remain below the CFR. The total PWLB borrowing was £234.606m and short-term borrowing form other local authorities was £31.0m, a full breakdown of loans was provided in the report.  Cash available and potential returns for investments were both low and were expected to remain low for the duration of the strategy. There was a minimum investment balance of £12m as the core strategy to maintain liquidity.

At the 31 December 2022, £24.978m was held in investments this included an outstanding balance of £4.650m from Qualis, a breakdown of investments was provided in the report.  A cautious approach was being taken in relation to investment counterparties and limits, as advised by Arlingclose. Treasury Indicators were detailed in the report and these would be reported to this Committee as per the work programme. The Investment Strategy provided detail on wider investments including commercial investments.

The Vice Chair, Mr Jarvis raised concerns about the Audit and Governance Committee recommending the Treasury Management Strategy and Capital Strategy 2022/23 to 2026/27 for approval to Cabinet due to the complexity of the documents, he suggested that there should be wider deliberation and that this was not part of the governance  role. The Section 151 Officer, A Small, detailed the report aimed to provide a complete oversight in relation the strategy for investments and capital expenditure for comment and reaffirmed was not approval for individual spending decisions. He advised that the Treasury Management Strategy and Capital Strategy were governance documents that brought together and set out the risk of the accumulated decisions of Cabinet and Council into one place and as such it was appropriate that this was put before the Audit and Governance Committee. The reports were prepared by professional officers and whilst the Section 151 Officer as the strategic lead on the Council’s finance was content with the documents, the Committee should decide if they were reassured by the advice of officers. Cllr Philip advised that full Council approved the Strategies and this Committee made a recommendation to Council, and the Chair could ask the Constitution Working Group to confirm that the Treasury Management and Capital Strategy should come to this Committee.

 

Tony Jarivs reaffirmed his position and advised his reservations remained due to the complexity of these strategies, as  ...  view the full minutes text for item 40.

41.

Capital Strategy 2022/23 to 2026/27 pdf icon PDF 638 KB

(A Small) To consider the Capital Strategy 2022/23 to 2026/27 Minimum Revenue Provision Statement (MRP) 2022/23 (attached).

Additional documents:

Minutes:

The Chief Financial Officer, C Hartgrove, introduced the Capital Strategy 2022/23 to 2026/27, and highlighted a correction to paragraph 2.3.4 of the report. The CFR is expected to increase by £69.5m and not £42.9m.

 

The Councils’ current and emerging programme was a large programme and covered the General Fund and the Housing  Revenue Account. There was a planned spend of £93.6m in 2022/23 and a total of £293m over the five year period to 2026/27. The delivery of the programme would require increased external borrowing, forecast to rise over the next three years to £487.7m in 2025. Wider topics considered in the Capital Strategy included the Council’s approach to Asset Management, Treasury Management, Service Investments, Commercial Investments, Financial Guarantees, and the way in which professional capacity was maintained through the development and maintenance of knowledge and skills, and the selective use of professional advisors. 

 

The Minimum Revenue Provision (MRP) 2022/23 policy, remained unchanged, this ensured the Council acts prudently in setting aside funds to meet the repayment of the principal on loans taken out on the General Fund.

 

The Committee’s attention was drawn to the comments of the Section 151 Officer, who was satisfied that the proposed Capital Programme was prudent, affordable and sustainable.

 

Tony Jarvis confirmed that he had reservations due to the complexity of these Capital Strategy and as a consequence he would abstain from  the vote on the recommendation to approve this to Council.

 

The Committee sought clarity on the repayment and affordability of loans and were advised that affordability indicators were included, to give assurance that the interest could be covered. Since the initial maturity loans that were taken out for the housing Revenue Account, a large proportion of the borrowing was in equal instalments of principal (EIP) loans and the principle would be paid back over the course of the loan. The MRP was a statutory requirement to make provision in the annual budget to repay outstanding debt.

 

Resolved:

The Committee

  1. Considered and recommended the Capital Strategy 2022/23 to 2026/27 to full Council for approval to Council, and
  2. Considered and recommended Minimum Revenue Provision Statement (MRP) 2022/23for approval to full Council
  3. Agreed that delegated authority be given to the Section 151 Officer, in consultation with the Chairman of the Committee, to make any necessary late adjustments to the financial information, as necessitated by finalisation of the Budget for 2022/23, prior to presentation of the final draft Strategy to Council on 24 February 2022.

 

42.

Any Other Business

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.

Additional documents:

Minutes:

No other business was raised for consideration by the Committee.

43.

Exclusion of Public and Press

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):

 

Agenda Item No

Subject

Exempt Information Paragraph Number

Nil

Nil

Nil

 

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.

Additional documents:

Minutes:

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