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.

(Democratic Service Officer) Under Article 11, paragraphs 13 – 17, of the Constitution, the Chairman and Vice-Chairman of the Committee shall be appointed at the first meeting of the municipal year for a term of one year.

Both Councillors and Co-Opted 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.

The Chairman and Vice-Chairman from the previous municipal year are eligible for re-appointment.

The Democratic Services Officer advised the Committee that it needed to elect a Chairman and Vice-chairman for 2022/23. Nominations were invited from the Committee for the role of Chairman for the forthcoming municipal year. Following the election of the Chairman, Cllr P Bolton, invited nominations for the role of Vice-Chairman for the forthcoming municipal year.

Resolved:

(1)   Cllr P Bolton be elected Chairman of the Audit and Governance  Committee for 2022/23; and

(2)    Mr A Jarvis be elected Vice-Chairman of Audit and Governance Committee for 2022/23.

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 17 March 2022.

          RESOLVED:

That the minutes of the meeting held on 17 March 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.

The Strategic Director Corporate and Section 151 Officer, A Small, advised the committee that the Council had reached agreement with the external auditors, Deloite, that the 2020/21 and 2021/22 accounts would be audited back to back and the Committee would be updated at the September 2022 meeting.

To consider the attached work programme for the Committee for 2022/23.

The Committee noted its Work Programme for 2022/23.

(Chief Internal Auditor) To consider the attached report.  REPORT TO FOLLOW.

The Corporate Fraud Team Manager, Martin Crowe, set out the focus and approach of the Corporate Fraud Team for the year 2022/23. Proactive work would be based on intelligence-based projects, the first project on suspected fraudulent activity in relation to procurement had started. Investigations and reactive work would respond to 100% of referrals including reports of suspected fraud from members of the public, staff etc. Work would continue on the National Fraud Initiative exercise and joint working would be explored.

The Committee sought clarity on work with Harlow and were advised this would be charged on a fixed fee for right to buy investigations.

Resolved:

The Committee approved the Corporate Fraud Team’s Strategy for 2022/23.

(Chief Internal Auditor) To consider the attached report.

The Chief Internal Auditor, S Marsh, detailed the importance of this annual report which fed into the Annual Governance Statement and provided her opinion on the adequacy of internal controls for 2021/22. The report provided a summary of the work completed, the assurance required and detailed how the opinion had been recached. She stated her overall opinion was that the Council had adequate and effective governance, risk management arrangements and control processes, this was the highest opinion that could be given. She also advised the Committee that there had been no limited assurance reports in 2021/22, that the tracker process had worked well and there were no significant issues to report, there had been no special investigations, the external Quality Assessment confirmed that the service conformed to the Public Sector Internal Audit Standards.

The Committee asked if there were implication if recommendations in the tracker were not completed. S Marsh explained that timescales associated with recommendations were challenged and agreed and any overdue items were brought to the attention of the Committee.  If there were sound reasons to refresh the implementation date, the original date was maintained in the tracker.  This allowed service areas to be called to account.  She advised the Committee there were no concerns in relation to the recommendation tracker at this time.

The Committee received confirmation that there was no problem with staff numbers and resources, and that there had been a shift to work with services to facilitate solutions.

Resolved

The Committee:

1.      Noted the Annual Report of the Chief Internal Auditor for 2021/22 and the assurance level given, and

2.      Agreed that for the 12 months ended 31 March 2022, the Council had operated adequate and effective governance, risk management arrangements and control processes.

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

The Chief Internal Auditor, S Marsh advised the Committee that there was a mandatory requirement to publish and an Annual Governance Statement (AGS), this provided detail of how governance arrangements had worked 2021/22 and would accompany the Statement of Accounts.  The AGS set out the governance framework, and the effectiveness of the framework had remained fit for purpose. The progress and action for the significant issues identified in 2021/22 were detailed. Covid was mentioned in the report, but this had not impacted on the governance arrangements. The governance issues for 2022/23 were identified as: economic issues; statement of accounts; financial management code review, and the common themes from the service areas were business continuity and financial regulations.

The Committee asked if remote working had affected the audit programme and operational process between departments, they were advised that there had been no impact on the audit programme, there had been different ways of working, officers were very accessible, data could be used to provide a good level of assurance, and there had been a concerted effort to ensure cross department working.

Resolved:

(1)         The Committee reviewed, commented, and recommended the draft Annual Governance Statement for 2021/22.

(Chief Internal Auditor) To note the attached report.  REPORT TO FOLLOW.

The Corporate Fraud Team Manager, Martin Crowe, outlined the  Corporate Fraud Team Annual Summary and advised the Committee that Covid had impacted on the working practices of the team, specifically in relation to visiting properties which had now resumed. The investigation activity was summarised: 37% of cases were closed as fraud had been detected and proved; 100% of right to buy applications had been vetted and 18 of these applications had been stopped or withdrawn;  7 investigations into tenancy succession had been carried out and 3 of these had been fraudulent; there had been success in identifying 2 illegal subletting cases; prepayment checks were carried out on Covid grants; and a new fraud information management system had been implemented and tested.

The Committee asked if incentives were available to the public for reporting fraud, they were advised that the ‘know a cheat in your street scheme’ was ongoing, incentive schemes had been previously considered but had not gone forward.

Resolved

The Committee noted the Corporate Fraud Team Annual Summary for 2021/22

(Chief Internal Auditor) To consider the attached report.

The Chief Internal Auditor, S Marsh detailed that the Annual Report of the Audit and Governance Committee outlined the Committee’s work and achievements over the year ending 31 March 2022. The Annual Report helped to demonstrate to residents and the Council’s other stakeholders the vital role carried out by the Audit and Governance Committee and the contribution that it makes to the Council’s overall governance arrangements.

Resolved:

            The Committee 

1.              Agreed to recommend the Annual Report for the Audit and Governance Committee for 2021/22 and refer to Council.

(Chief Internal Auditor) To consider the attached report.

The Senior Auditor, S Lindsey, detailed the progress made against the audit plan and advised the Committee that four final audit reports had been issued since the last meeting:- Council Housebuilding had received substantial assurance, Leisure Management Contracts, Treasury Management and IT Major Incident Management had all received moderate assurance. The recommendation tracker showed a steady decline in overdue recommendations and zero high priority recommendations.

The Committee noted the moderate assurance treasury management and requested that a future treasury management report highlight the issues and how these had been resolved.

Resolved:

The Committee noted the summary of the work of Internal Audit and the

Corporate Fraud Team for the period March to June 2022

(Strategic Director Corporate and Section 151 Officer) To consider the attached report.

The Section 151 Officer, A Small advised the Committee the officer risk management group had reviewed the risk register and the risk around the increase in demand for financial and housing assistance had increased due to the emerging fuel poverty crisis and rise in living costs. The financial resilience of the Council was being closely monitored due to the general inflationary risks and mitigation actions were being developed.

The Committee raised concerns on the risk of interest rate increases, specifically in relation to high borrowing and the third-party partner, Qualis, The Section 151 officer explained there was risk and economic pressure in relation to building inflation, and The Council’s debt was on a low rate fixed interest cost for 15/20 years. Future borrowing for the Capital Programme would be a risk and a robust business case would be required.

The Committee received confirmation that all Qualis loans had a margin for the Council and that service disruption would be viewed as an emerging risk, if economic risk transcribed into an impact on service delivery.

Resolved:

The Committee reviewed and endorsed the risk register.

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.

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