Agenda item

(Chief Internal Auditor) To consider the attached report (AGC-012-2015/16).

The Chief Internal Auditor presented a report on the proposed terms of reference for the Audit and Standards Committee.

The Chief Internal Auditor advised the Committee that many local authorities had combined their Audit and Standards Committees, especially as the workload of the Standards Committee had dwindled over recent years since the introduction of the Localism Act 2011. The proposal was to combine the Standards Committee with the Audit and Governance Committee and have a combined Terms of Reference that followed good practice from the Chartered Institute of Public Finance and Accountancy (CIPFA). The Committee was reassured that there were no new functions in the proposed Terms of Reference that were not already being performed by one of the two Committees.

The Chief Internal Auditor highlighted one issue concerning oversight of Treasury Management. Currently, it was the Audit & Governance Committee which provided Member monitoring of the Council’s Treasury Management function, and the Committee received three reports per year, in September, November and February. If this function was provided by the Resources Select Committee instead, then the number of meetings for the Audit & Governance/Standards Committee could be reduced from the current five to four each year.

The Chief Internal Auditor stated that if the Committee was in agreement then final approval for the merger of the Audit & Governance and Standards Committees would need to be sought from the Council following formal consultation with the Standards Committee and possibly the Resource Select Committee as well depending on the outcome of discussions regarding the oversight of Treasury Management.

The Director of Governance added that the Council needed a facility to deal with complaints if necessary, and that vehicle was the Standards Committee. The Standards Committee had more issues to deal with in the past, but the Localism Act 2011 delegated authority to the Monitoring Officer to deal with Member behaviour issues and report the outcomes to the Standards Committee. And although it still had a role in examining and commenting upon protocols and procedures, it no longer had enough business to merit being a separate Committee. There would be a standing item on each agenda of the new Committee for Standards issues, and this approach had worked well at other Councils. It was also highlighted that the Independent Members would not have voting rights on any Standards issues considered by the new Committee.

The Director of Resources reminded the Committee that the Council used Arlingclose for Treasury Management advice, and Member training events for Treasury Management were held each year. It was acknowledged that Member knowledge of Treasury Management would vary each year, and that the Independent Members of the Audit & Governance Committee had provided the on-going expertise.

The Committee welcomed the report and were in general agreement that the Committees should merge as it would be more efficient. It was felt that oversight of the Treasury Management function should remain with the new Committee. It was highlighted that Treasury Management would be reported to Audit in the private sector and it would be expected that Audit would have some oversight. In an ideal world, the Committee would have some investment experience as well.

Resolved:

(1)        That the proposal to merge the Audit & Governance Committee with the Standards Committee be approved in principle;

(2)        That, subject to them being achievable, the proposed Terms of Reference for the Audit & Standards Committee be agreed;

(3)        That oversight of the Council’s Treasury Management function be retained by the Audit & Standards Committee;

(4)        That the views of the Standards Committee on the proposed merger be sought; and

(5)        That the Constitution Working Group be requested to consider the necessary constitutional amendments and report to the Council accordingly.