Agenda and minutes

Audit and Governance Committee
Monday, 27th November, 2017 7.00 pm

Venue: Council Chamber - Civic Offices. View directions

Contact: Gary Woodhall (Governance Directorate)  Tel: 01992 564470 Email:  democraticservices@eppingforestdc.gov.uk

Items
No. Item

26.

Webcasting Introduction

The Chairman will read the following announcement:

 

“I would like to remind everyone present that this meeting will be recorded for subsequent repeated viewing on the Internet and copies of the recording could be made available for those that request it.

 

By being present at this meeting it is likely that the recording cameras will capture your image and this will result in your image becoming part of the broadcast.

 

You should be aware that this might infringe your human and data protection rights. If you have any concerns please speak to the webcasting officer.

 

Please could I also remind members to put on their microphones before speaking by pressing the button on the microphone unit.”

Minutes:

The Director of Governance 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.

27.

Declarations of Interest

(Director of Governance) To declare interests in any item on this agenda.

Minutes:

There were no declarations of interest pursuant to the Member Code of Conduct.

28.

Minutes

(Director of Governance) To confirm the minutes of the last meeting of the Committee held on 18 September 2017 (previously circulated).

 

Click here for Audit & Governance Minutes 18 September 2017

Minutes:

Resolved:

 

(1)        That the minutes of the meeting held on 18 September 2017 be taken as read and signed by the Chairman as a correct record.

29.

Matters Arising

(Director of Governance) To consider any matters arising from the previous meeting.

Minutes:

Cllr Patel thanked the Officers for providing an answer to his question at the last meeting regarding emergency evacuation plans for the Council’s sheltered accommodation sites.

30.

Audit & Governance Work Programme 2017/18 pdf icon PDF 75 KB

(Director of Governance) To consider the attached Work Programme for 2017/18.

Minutes:

The Chief Internal Auditor stated that the reports on the Review of the Audit & Governance Committee Terms of Reference, and the Committee’s Effectiveness, would be considered at the meeting scheduled for 5 February 2018, following the issue of new guidance from the Chartered Institute of Public Finance & Accountancy (CIPFA). Information Regarding the Whistle Blowing Policy, currently unallocated, had now been included in the Internal Audit Monitoring Report for consideration at this meeting.

31.

Annual Audit Letter 2016/17 pdf icon PDF 128 KB

(External Auditor) To consider the attached report (AGC-011-2017/18).

Additional documents:

Minutes:

The Director of Resources introduced, and the External Auditor presented, a report on the Annual Audit Letter for the financial year 2016/17.

 

The External Auditor stated that the Annual Audit Letter summarised the key issues arising from their work during the year. The Letter confirmed that the Council’s financial statements gave a true and fair view of the Council’s financial affairs, and that the Annual Governance Statement was neither misleading nor inconsistent with other information. The External Auditors were satisfied that the Council had proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources, which enabled an unqualified ‘Value for Money’ conclusion to be issued. The Letter also confirmed that the External Auditors had no reason to exercise their statutory powers and that there were no matters to report to the Committee. An Audit Certificate to close the audit for the year ended 31 March 2017 was issued on 27 September 2017.

 

In response to questions from the Members of the Committee, the External Auditor reiterated that the conclusion of the Audit was unmodified, and therefore there were no real issues identified or amendments required.

 

The Finance Portfolio Holder thanked the External Auditor for the unqualified conclusion in their report, and congratulated the Officers at the Council for their efforts in attaining this conclusion. The Portfolio Holder added that, when ranked alongside other Councils throughout Essex, Epping Forest was an excellent Council.

 

Resolved:

 

(1)        That the Annual Audit Letter for 2016/17, issued by the External Auditor, be noted.

32.

Mid-Year Report on Treasury Management and Prudential Indicators 2017/18 pdf icon PDF 168 KB

(Director of Resources) To consider the attached report (AGC-012-2017/18).

Additional documents:

Minutes:

The Director of Resources presented the mid-year progress report on the Council’s Treasury Management function and Prudential Indicators, which covered the treasury activity for the first half of 2017/18, and was a requirement of the Chartered Institute of Public Finance & Accountancy (CIPFA) Code of Practice on Treasury Management.

 

The Director reported that, during the first half of the year, the Council had continued to finance all Capital expenditure from within internal resources. The estimate for the Capital Programme during 2017/18 had indicated expenditure of £38.715million, which would be financed by capital grants, capital receipts, revenue and £3.691million of borrowing. The Capital Programme for the five-year period ending 31 March 2021 had predicted expenditure of £124million, partly funded by borrowing of £24million, with £1.7million available in usable Capital Receipts and £nil million in the Major Repairs Reserve. There had been no breaches of the Authorised Limit (£250million), the Operational Boundary (£240million) or the Maturity Structure of Fixed Rate Borrowing during the period to 30 September 2017.

 

The Director advised the Committee that the Council had £30.1million under investment as at 30 September 2017, and the average net investment position of the Council had been approximately £35.7million throughout the first half of 2017/18. The Council’s investments as at 30 September 2017 had consisted of £15million in fixed investments and £15.1million in cash and cash equivalents. The importance of carefully monitoring and controlling the Council’s cash flow to ensure enough funds were available each day to cover outgoings was highlighted; this would become more difficult as the Council used up its Capital Receipts and reduced its investment balances.

 

The Director stated that the Council held loans totalling £185.5million as at 30 September 2017, the majority of which had funded the self-financing of the Housing Revenue Account (HRA). It was anticipated that the Council would require further loans in 2017/18 to fund capital projects such as the Epping Forest Shopping Park. The revised Capital Programme for the five-year period to 2021/22 would be considered by the Cabinet at its meeting scheduled for 7 December 2017.

 

Finally, the Director added that there had been no breaches of any of the Prudential Indicators relating to Capital Activity, the Indebtedness for Capital Purposes, and the Council’s overall Treasury Position. The Department of Communities & Local Government (DCLG) had recently issued a consultation on borrowing by Local Authorities, as there were concerns that some Councils were borrowing from the Public Works Loan Board to plug funding gaps. The Committee was reassured that any borrowing undertaken by this Council to finance the Capital Programme enabled projects to be delivered which would improve the local economy within the District.

 

When questioned by the Committee, the Director stated that the vast majority of the non-HRA capital expenditure related to finishing works for the Epping Forest Shopping Park, whilst it was likely that there would be an underspend for the HRA Capital Programme this year as it was expected that phases IV, V and VI of the Council Housebuilding Programme would finish in  ...  view the full minutes text for item 32.

33.

Internal Audit Monitoring Report - September to November 2017 pdf icon PDF 139 KB

(Chief Internal Auditor) To consider the attached report (AGC-013-2017/18).

Additional documents:

Minutes:

The Chief Internal Auditor presented the Internal Audit Monitoring Report for the period September to November 2017.

 

The Chief Internal Auditor advised the Committee that three reports had been issued since the previous meeting, all of which had been given substantial assurance: Health & Safety – Lone Working; Council Housebuilding Programme; and Local Plan Staffing Resources. The Audit Recommendation Tracker currently contained 3 recommendations which had passed their due date; one medium priority recommendation for Health & Safety – Townmead Depot, and two low priority recommendations for External Data Transfers.

 

The Chief Internal Auditor reminded the Committee that a limited assurance audit report had been issued regarding Health and Safety at the Townmead Depot. A detailed action plan was drawn up and good progress was being made to address the issues raised. As part of this, an independent Fire Risk Assessment was undertaken in February 2017 which made further recommendations concerning fire safety. The majority of these recommendations had yet to be actioned, and an interdisciplinary group had been established to address this.

 

The Chief Internal Auditor reported that the Corporate Fraud Team had achieved the following since September 2017:

·        three further Right-to-Buy applications had been stopped or withdrawn;

·        a further Council-owned property, which had been the subject of a succession fraud, had been recovered;

·        a former tenant had been convicted of two counts of fraud relating to illegal sub-letting;

·        a further Social Housing fraud prosecution was scheduled to go to trial in early 2018; and

·        a joint working arrangement had been entered into with Broxbourne Borough Council, on a paid-for basis, to provide a fraud service for two days per week.

 

The Chief Internal Auditor stated that the review of the data matches from the National Fraud Initiative for 2016/17 was in progress and Internal Audit was providing training and guidance for Officers to review their matches. Previous exercises had found that many matches were not fraudulent and there was usually a simple explanation; no significant frauds had been identified to date.

 

The Chief Internal Auditor added that staff within the shared service were represented on a number of business groups and project teams in addition to less formal meetings, to provide advice and guidance, including:

·        the General Data Protection Regulation (GDPR) Working Party;

·        Programme and Project Management;

·        Personal Data (Payroll/HR);

·        the Corporate Debt Working Party; and

·        the Risk Management Group.

 

Finally, the Chief Internal Auditor informed the Committee that the Council’s Whistleblowing Policy and Procedure had been revised and approved by the Corporate Governance Group. The two main procedural changes were:

 

            (i)         Timescales – setting out how long an investigation might take; and

 

            (ii)        Investigating Procedures – to guide staff who might be nominated as           an Investigating Officer.

 

Staff would continue to be reminded about the Council’s Whistleblowing Policy and Procedure on a periodic basis in ‘District Lines’ as well as through poster campaigns. The Committee was requested to recommend the approval of the Policy and Procedure to the Council.

 

Cllr Jennings felt that Lone Working training should  ...  view the full minutes text for item 33.

34.

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.

Minutes:

The Committee noted that there was no other urgent business for consideration at the meeting.

35.

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.

Minutes:

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