Agenda and minutes

“I would like to remind everyone that this meeting will be filmed live or recorded, and uploaded to the internet and will be capable of repeated viewing.

Therefore, by participating in this meeting, you are consenting to being filmed and to the possible use of those images and sound recordings.

If any public speakers on MS Teams do not wish to have their image captured, they should ensure that their video setting throughout the meeting is turned off and set to audio only.

Members and public speakersare reminded to turn on their microphones before speaking and turn them off when they have finished.”

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 Services Officer) - To seek nominations for the Chairman of the Committee.

(Chairman) To seek nominations for the Vice Chairman of the Committee

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.

Resolved:

(1)                That Cllr Jon Whitehouse be elected Chairman of the Audit & Governance Committee for the 2024/25 municipal year; and

(2)                That S Heiberg be elected Vice-Chairman of the Audit & Governance Committee for the 2024/25 municipal year.

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 28 March 2024.

Resolved:

That the minutes of the meeting held on 28 March 2024 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 form the minutes of the previous meetings which warranted further discussion.

To consider the attached work programme for the Committee for 2024/25.

The Committee requested that the newly appointed external auditors, Ernst and Young, update the Committee at a future meeting, and noted the work programme.

Deloitte ( External Auditor) To provide an update and progress report.

M Ramzen, External Auditor Deloitte advised the Committee that specific progress made was as detailed in  ISA 260 Report 2021/22, on the agenda and that liaison with the new auditors Ernst and Young would take place in due course.

To consider and commnet on the ISA 260 Report 2021/22.

Mo Ramzan, External Audit, Deloitte, gave a brief update on the progress on the 2021/22 audit and the ISO 260 report, and highlighted an outstanding point in relation the land disposal as detailed in the key messages of the report. He advised the Committee that it was anticipated that an unmodified audit opinion would be issued.

Resolved:

The Committee noted the ISO 260 report

(Strategic Director Corporate and Section 151 Officer) To consider and comment on the (audited) statement of accounts 2021/22.

Andrew Small, Strategic Director and Section 151 Officer,  provided some context for the consideration of 20021/22 accounts, and highlighted national issue of delayed external audit of public sector accounts, and the proposed legislation that all outstanding accounts to 2022/23 must be concluded  by the ‘backstop date’ of 13 December 20204.

A summary of the report was presented to the Committee, and it was noted that recommendation 2 of the report had been superseded to read that the Audit and Governance Committee adopt the Statement of Accounts for 2021/22. This was in line the responsibility of the Committee as detailed in Article 11 section 3r of Epping Forest District Council’s Constitution.

The committee sought clarification on the outstanding issue in relation to the sale of north weald land, they were advised that this was linked to the classification of asset, and if this was a operational asset or an asset held for sale, evidence would be provided to the external auditor, The classification and which group the sale of the fixed asset on the balance sheet would then be confirmed.  It was noted that this did not affect the valuation of the asset.  The Committee were advised that treasury management advisors were commissioned annually to consider the  provision of credit losses.

Resolved

That subject to the resolution of any outstanding issue on land sale, the statutory Statement of Accounts for 2021/22 be adopted.

To consider and commnet on the audit planning report 2022/23.

Mo Ramzan, External Auditor, Deloitte outlined the draft audit planning report for 2022/23, which was in progress the report set out the scope of work, significant risks. Work was in progress and there was regular liaison with the finance team to complete the audit and provided an opinion before the ‘backstop provision’ date of 13 December 2024,

The committee sought clarity on the repercussions of not meeting the backstop date and were advised that this could result in a partial disclaimer on the areas of work not completed with a modified opinion being issued.

The Committee challenged how the materiality had been judged as appropriate by Deloitte and were advised that this was a standard approach across the sector, and no adjustment had been warranted for the Council.

Resolved:

The Committee noted the draft audit planning report , and requested an update on progress at the next meeting

(Strategic Director Corporate and Section 151 Officer) To consider and comment on the Treasury Management Outturn 2023/24.

Chris Hartgrove, Interim Director of finance and Deputy Section 151 Officer, presented the Treasury Management Outturn 2023/24 report and highlighted the borrowing position had decreased by £28.5 million,  from £281.6 million to £253.1 million, during the period April 2023 to March 2024; and the Investment position had increased from £14.1 million to £43.9 million during the same period.  The commercial property, balance sheet value was £156.224 million at 31st March 2024.

The Deputy Section 151 Officer, provided assurance to the Committee that that the 2023/24 fully complied with  CIPFA’s Treasury Management Code and the Treasury Management Strategy for 2023/24, including prudential and other adopted indicators.

The Committee received clarity that PWLB loans could be taken for regeneration purposes,

The Committee noted the reduction in debt as a result of the capital receipt for the sale of land.

Resolved:

The Committee noted and commented on the report.

(Strategic Director Corporate and Section 151 Officer) To note the Draft Statement of Accounts 2023/24.

Andrew Small, Executive Director and Section 151 Officer, introduced the draft statement of accounts for 2023/24 which published on 28 May 2024, and would be audited by Ernst and Young.

It was noted that the audited statement of accounts for 2023/24 would be presented to the Committee for adoption at a future meeting.

The Committee commended the finance service for the production of the statement of accounts in such a timely manner.

Resolved:

The Committee noted the report.

(Strategic Director Corporate and Section 151 Officer) To comment on the Treasury Management Quarter 1, 2024/25 update.

Chris Hartgrove, Interim Director of Finance and Deputy Section 151 Officer, presented the Treasury Management quarter 1 update, 2024/25 and advised the Committee that at 30th June 2024, external borrowing had reduced to £252.4 million, and investments had reduced to £31.1 million. Loans to Qualis were as shown, in table 5 of the report, as service investments and amounted to £69 million at 30 June 2024.

Assurance was given to the Committee that there was full compliance with  CIPFA’s Treasury Management Code and the prudential and other adopted indicators.

Resolved:

The Committee noted the report.

(Head of Internal Audit) To note the annual report of the Head of Internal Audit for 2023/34, and agreed the recommendation of the report.

The Head of Internal Audit, Sarah Marsh, advised the Committee that this report fed into would feed into the Annual Governance Statement, and that based upon the results of work undertaken during the year it was her overall opinion that the Council has adequate and effective governance, risk management arrangements and control processes. Where there had been significant issues these had been accepted by Management and promptly corrected. 

The Committee were advised that guidance from CIPFA would address the new global standards and codes of practices for audit.

Resolved:

The Committee noted the report and agreed that for the 12 months ended 31 March 2024, the Council had operated adequate and effective governance, risk management arrangements and control processes.

(Head of Internal Audit) To consider and comment on the draft Annual Governance Statement.

The Head of Internal Audit, Sarah Marsh, presented the Council’s Annual Governance Statement for 2023/24, and advised the committee that there were sound governance arrangements in place.  The areas that would be monitored during 2024/25, were as detailed in the report.

The Committee highlighted the complex and different governance arrangements  with partners, and other organisations and asked internal audit to consider if the governance arrangements were effective.

Resolved:

The Committee comments and noted the report

(Head of Internal Audit)  To consider the attached report.

The Head of Internal Audit, Sarah Marsh, presented the Audit and Governance Committee  2023/24 report  and highlighted that no changes were proposed to the terms of reference for the Committee. The Committee had carried out its own effectiveness review, the resulting action plan had been completed and it was proposed that the review process should be repeated.

The Committee were advised that the Committee needed a minimum of three members in attendance to be quorate, as detailed in the Council’s Constitution.

Resolved:

The Committee noted its terms of reference and agreed the Annual Report for the Audit and Governance Committee, 2023/24 and referred should be referred to Council for approval.

(Head of Internal Audit)  To conisder the attached report.

Martin Crowe, Corporate Fraud Team Manager, outlined the Corporate Fraud Team Annual Summary for 2023/24, and key areas of work for the year.

There had been 32 new investigations, 23 had  been closed, of which  52% had fraud proven.  The internal investigation detailed in the report had been concluded.

The Committee queried the relationship between the control frameworks and the fraud investigation, and were advised that when necessary the control frameworks were amended.

The Committee were advised that it was dependant on the nature of the offence if the Council received, fines imposed by the Courts.

The Committee were advised that an intelligence led risk-based approach was now taken when assessing fraud referrals, but no referrals were disregarded.

Resolved:

The Committee noted the report.

(Head of Internal Audit) To consider and comment on the Internal Audit Progress 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. Four final reports had been issues, and the recommendation tracker showed 9 overdue recommendations, one of which was high priority this related to the service level agreement with Qualis Property Solutions. Other activities carried out by the service were as detailed in the report.

Resolved:

The Committee noted the internal audit update.

(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, presented the reported and highlighted the high level risks associated with cyber security and the quality of planning decisions. The Committee were advised that an risk appetite had not been incorporated, as yet, into the risk management process.

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.

RESOLVED:

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