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Agenda and minutes

Venue: Committee Rooms A, B and C, Civic Offices, Elstree Way, Borehamwood

Contact: Allan Siao Ming Witherick  020 8207 7806

No. Item



To receive details of any change in Membership of this Committee notified since the agenda was printed.


Councillor F Turner substituted for Councillor C Barker.


Communications and Apologies for Absence

(a) Communications (if any) relating to business on the agenda.

(b) Apologies for absence.


Apologies for absence had been received from Councillor C Barker.

Councillor P Hodgson-Jones had given apologies for lateness in advance.


Declarations of Interest

Members are required to declare any disclosable pecuniary interests they or their spouse/partner have in any matter which is to be considered at this meeting.  Members must also declare any other pecuniary or non-pecuniary interests they have in any matter to be considered at this meeting. The responsibility for declaring an interest rests solely with the member concerned.


Members must clearly state to the meeting the existence and nature of any disclosable pecuniary interest, other pecuniary interest or non-pecuniary interest and the agenda item(s) to which it/they apply.


Disclosable Pecuniary Interests are prescribed by the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012 as follows;


Employment, office, trade, profession or vocation


Any employment, office, trade, profession or vocation carried on for profit or gain.




Any payment or provision of any other financial benefit (other than from the relevant authority) made or provided within the relevant period in respect of any expenses incurred by a member in carrying out duties as a member, or towards your election expenses. This includes any payment or financial benefit from a trade union within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992.




Any contract which is made between the relevant person (and a body in which the relevant person has a beneficial interest) and the relevant authority— (a) under which goods or services are to be provided or works are to be executed; and (b) which has not been fully discharged.




Any beneficial interest in land which is within the area of the relevant authority.




Any licence (alone or jointly with others) to occupy land in the area of the relevant authority for a month or longer.


Corporate tenancies


Any tenancy where (to the member’s knowledge) - (a) the landlord is the relevant authority; and (b) the tenant is a body in which the relevant person has a beneficial interest.




Any beneficial interest in securities of a body where - (a) that body (to the member’s knowledge) has a place of business or land in the area of the relevant authority; and (b) either (i) the total nominal value of the securities exceeds £25,000 or one hundredth of the total issued share capital of that body; or (ii) if the share capital of that body is of more than one class, the total nominal value of the shares of any one class in which the relevant person has a beneficial interest exceeds one hundredth of the total issued share capital of that class.


In cases of disclosable pecuniary interest, Members must withdraw from the meeting room while the matter is being considered.


No Members had an interest to declare in relation to the items of business on the agenda for the meeting.


Minutes pdf icon PDF 87 KB

To approve and sign the ATTACHED minutes of the meeting of the Committee held on 25 October 2018.


In accordance with the Constitution, no discussion shall take place upon the minutes, except upon their accuracy.


RESOLVED that the minutes of the meeting held on 25 October 2018 were approved and signed as a correct record.


Anti-Fraud Plan 2019/20 - Shared Anti-Fraud Service (SAFS) pdf icon PDF 145 KB

The ATTACHED report provides the Committee with details of the proposed Hertsmere Borough Council Anti-Fraud Action Plan for 2019/20.

It includes:

Appendix A – LGA Councillors Workbook

Appendix B – SAFS/HBC Anti-Fraud Plan 2019/2020

Additional documents:


The Shared Anti-Fraud Service (SAFS) submitted the proposed Hertsmere Borough Council Anti-Fraud Plan 2019/20. This plan set out the programme of work for the year ahead and formed part of the Council’s assurance framework.


The Corporate Director highlighted the benefits of using the SAFS including the ability to make use of a wider team with specialist skills.


Members asked how the Anti-Fraud Plan would be applied to the council group companies and were informed that this was dealt with in two different ways.  Where the Council had a concern, they could ask the SAFS, or the Shared Internal Audit Service (SIAS), to investigate the situation as a principal shareholder.  Separately the different organisations could commission SAFS and SIAS, or appoint externally, for their own purposes.


A query was raised as to whether the level of resourcing for the service was sufficient and how it might vary if this was changed.  Examples were given of where the County Council had invested money to reduce fraud including where there was minimal financial benefit to the council, such as the misuse of blue badges.  The Corporate Director confirmed that they believed SAFS was providing value for money but that a report on potential impacts for the next meeting would be requested.



1)    The Hertsmere Borough Council Anti-Fraud Service Action Plan 2019/20 be approved.

2)    Members read and review the LGA Councillors Workbook on Fraud and Bribery Prevention 2017.

3)    That the LGA Councillors Handbook be circulated to all Members.

4)    That a report be brought to the next meeting outlining the potential impact on SAFS if the level of resourcing was to be changed.


(Action: Shared Anti-Fraud Service Manager)

[During the following item Councillor P Hodgson-Jones arrived at 19:49.]


Progress Report - Shared Internal Audit Services (SIAS) pdf icon PDF 500 KB

The ATTACHED report provides the Committee with:

(a)  the progress made by the Shared Internal Audit Service in delivering the Council’s 2018/19 Internal Audit Plan as at 18 January 2019;

(b)  changes to the 2018/19 Audit Plan;

(d)  the implementation status of previously agreed audit recommendations; and

(e)  an update on performance management information as at 18 January 2019.


The Shared Internal Audit Service (SIAS) submitted a report to the Committee detailing progress made by SIAS on: delivery of the Council’s 2018/19 Internal Audit Plan as at 18 January 2019; proposed amendments to the 2018/19 Audit Plan; status of audit recommendations and an update on performance management information as at 18 January 2019.


The Committee was informed that, 85% of the 2018/19 Audit Plan days had now been delivered with 81% of the projects completed with a positive outlook for the workload.


The attention of the Committee was drawn to two areas.

·         The Lone-Working Contract review which had led to three high priority recommendations.

·         The ongoing work related to the CCTV Partnership Joint Executive governance arrangements where Stevenage Borough Council was the lead authority.


The Committee were reassured by Officers that all three recommendations relating to Lone-Working Contracts were in-hand.  These covered the creation of a centralised list of lone workers and the improved procurement and issue of personal safety devices.  Officers had included the possibility of issuing the devices to Members in certain circumstances and this was welcomed by the Committee.

The Internal Auditor undertook to include information on the review with their report for the next meeting.


The Committee recognised that Stevenage Borough Council were the lead authority for CCTV Partnership Joint Executive governance arrangements and that the audit report would therefore be monitored through their Audit Committee.  However, the Committee were keen to ensure proper oversight and ownership from Hertsmere Borough Council and it was agreed that a request for a report to be presented by the Hertsmere CCTV Member representative and the Head of Partnership and Community Engagement at the next meeting.



1)    The information contained in the Shared Internal Audit Service progress report (A/19/02) be noted and the amendments to the Audit Plan be approved.

2)    A report be requested from the Hertsmere CCTV Member representative and the Head of Partnership and Community Engagement on the CCTV Partnership Joint Executive governance arrangements to come to the next meeting of the Audit Committee.


[Action: Head of Partnership and Community Engagement]


External Audit Plan 2018/19 (Draft)(EY) pdf icon PDF 5 MB

The ATTACHED Audit Plan sets out how Ernst & Young intend to carry out their responsibilities as external auditor. It provides the Committee with a basis to review the proposed audit approach and scope for the 2018/19 audit. It will also help ensure that this audit is aligned with the Committee’s service expectations.


The Audit Plan set out how the external auditors intended to carry out their responsibilities; provided the Committee with a basis to review the proposed audit approach and scope for the 2018/19 audit; and also help to ensure that the audit was aligned with the Committee’s service expectations.


The External Auditor, in presenting the report, highlighted that a number of the risks shown such as mis-statement due to fraud or error were an inherent part of the international auditing standards and not specific to the Council.  The areas of concern related in many cases to the Council being active in a more commercial environment through its investments.  A need for a better understanding of the structure and relationships had been identified as this could have an impact on control.  The External Auditor confirmed that although some items were currently showing as red risks this reflected the current situation and would be revised once additional information had been received.


Members noted concern about the possible pension adjustment which had occurred during the previous audit and the increased uncertainty due to Brexit.  The External Auditor confirmed that the adjustment was likely to be included again if it represented a significant change.  Overall the materiality levels had remained the same and the overall risk on Value for Money was being met through the Council having in place “proper arrangements”.


The fee level had been reduced in line with the contracted agreement.  The Group Accounts would be audited and charged separately.


RESOLVED that the External Auditors’ proposed Audit Plan for the Year ending 31 March 2019 be noted.


Certification of Claims and Returns Annual Report 2017/18 (EY) pdf icon PDF 970 KB

The ATTACHED report summarises the overall assessment by Ernst and Young of the Council’s management arrangements for the certification process.


The External Auditors were required to certify certain claims and returns submitted by Hertsmere Borough Council due to the council receiving funds from the Department of Work and Pensions (DWP) towards housing benefits paid. Ernst & Young submitted a report on the outcome from their certification work for 2017/18.


The External Auditor reported that overall the value of the claim presented for certification was £38,552,302.  This had been subject to amendment with the subsidy reduced by £3,074, which was considered small.


The report had identified minor errors in Child Tax Credit which, when extrapolated across the £10 million expenditure on rent allowances, came to a total of £393 which the DWP could choose to clawback.


Overall the report was considered positive and the Committee noted the contents.


RESOLVED that the information contained in the certification report from the External Auditor be noted.


Local Government Audit Committee Briefing Q4 December 2018 (EY) pdf icon PDF 2 MB

To receive the ATTACHED briefing paper produced by Ernst & Young for Local Government Audit Committees.


The Committee received a briefing booklet from Ernst and Young entitled ‘Local Government Audit Committee briefing Quarter 4 December 2018’. This booklet was intended to support Audit Committees in their work and reported on technical issues as well as wider matters of potential interest to Audit Committee Members.


The External Auditor drew the Committees attention to key aspects of the report including the potential impacts of Brexit and changes in International Financial Reporting Standards for Financial Instruments (IFRS 9). Finally they touched on the differences between public expectations versus the role of Auditors and how this might impact future work related to Medium Term Financial Strategies.


The Committee noted that narrowing the expectations gap by informing the public about the role and value of audit, both internal and external, would be difficult to achieve.


RESOLVED that the information contained in the briefing report be noted.


New Accounting Standards and Review of Accounting Policies (F&BS) pdf icon PDF 133 KB

To receive a report, to FOLLOW, setting out the new accounting standards and review of accounting policies as a result of the Chartered Institute of Public Finance and Accountancy (CIPFA) Service Reporting Code of Practice for Local Authorities 2018/19.

Additional documents:


The Committee received a report updating them that there were two changes since the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for 2017/18.  These related to the introduction of new International Financial Reporting Standards (IFRS) for revenue recognition (IFRS15) and financial instruments (IFRS9).


Officers reported that the former, IFRS15, would not have a significant impact on the reporting of revenue as the Council was already using these principles and reported accounts for contract income on an accruals basis.


For IFRS9, which covers accounting for and the disclosure of financial instruments, Officers reported that the Council’s investments all fall to be accounted for at amortised cost. For loans advanced, the Council is assessing impairments and credit risks, which are expected to be minimal. The only material loan is the advance to Hertsmere Leisure Trust.  They would continue to follow good practise for collective debt, using an aged debt profile to assess risk, analysing sundry debtors by 30 days, 60 days and aged debts.  Officers took a prudent position on debts and would be looking at the most appropriate way to recognise risk inherent in the loans to Hertsmere Leisure Trust, Elstree Film Studios and Hertsmere Development Ltd.


It was recommended that the Council’s current accounting policies were retained except where they were affected by the changes in the Code of Practice 2018/19 and referred to throughout the report.



1)    That the Audit Committee note the key accounting changes and implications of the revised 2018/19 edition of the CIPFA Code of practice. (as set out in report paragraph 5.1)

2)    That the Audit Committee agree to amend the existing Accounting Policy Statement included in Appendix 1 to reflect the changes in accounting for financial instruments and income recognition.

3)    That the Audit Committee agrees that in all other respects the existing accounting policies remain unchanged for the purposes of the 2018/19 Statement of Accounts.


(Action: Head of Finance and Business)


Treasury Management Strategy Statement 2019/20 and Prudential Indicators 2019/20 to 2021/22 (F&BS) pdf icon PDF 168 KB

The ATTACHED report provides the Committee with the Treasury Management Strategy 2019-2020 and prudential indicators 2019/20 to 2021/22 for recommendation to Council for approval.

Additional documents:


The report provided the Committee with details of the proposed Treasury Management Strategy for 2019/20; the prudential indicators for the years 2020/21 to 2021/22.


Officers noted that, with the change last year to the European Union Markets in Financial Instruments Directive 2 (MIFID2), the council had resolved to act as a professional client to allow it to continue interacting with these counterparties and products.  This had been effective and the Council intended to retain this status.


An update on Treasury Management Practices (TMP) had come to the Committee in July 2018.  A further update covering commercial activity and non-treasury investment would be brought to the Committee later in the year.  The Capital Strategy would be reviewed and updated for presentation to Full Council along with the Capital Budget in February 2019.


Overall the report was positive due to the interest rate increase, higher Community Infrastructure Levy (CIL) balances, Capital programme slippage and the Hertsmere Leisure loan providing a return.


Separately a minor error had been identified in the tables on p175 of the agenda and this would be revised for submission to the Council for approval.


The Committee queried when the tender for Treasury Management Services would be renewed.  Officers confirmed that this was on a rolling basis as it was a limited field but would review the situation.



1)    The content of the Treasury Management Strategy 2019/20 and Prudential Indicators 2020/21 to 2021/22, attached at Appendix 1, be recommended to Council for approval; and

2)    The Minimum Revenue Provision (MRP) policy statement, detailed in paragraph 4.5 of the Treasury Management Strategy 2019/20, be recommended to Council for approval.

3)    The Annual Investment Strategy, set out in section 6 of the Treasury Management Strategy 2019/20, be recommended to Council for approval.


(Action: Treasury Manager/Head of Finance and Business

Services/Corporate Director)


Risk Management Progress Update pdf icon PDF 155 KB

The ATTACHED report reviews and updates the Strategic Risks facing this Authority.

Additional documents:


The Committee received a report reviewing and updating the strategic risks facing the authority.  The Corporate Director highlighted that the risk of “Illegal encampments” [SO31] had been reduced due to the successful use of an injunction on a significant number of sites across Hertsmere.


Members noted that the “Supply of Affordable Social Housing & Homelessness  [SO01] was still red, reflecting both a high likelihood and high impact and queried whether any additional actions could be taken to reduce this.  Officers responded that there were limited opportunities and that the Council was seeking to make best use of Section 106 agreements the Community Infrastructure Levy (CIL) and favouring direct provision over commuted financial sums.  The Council was challenging viability reports used by developers to reduce their obligations and also making use of clawback provisions to allow mid-development reviews to be conducted.


The Committee raised concerns about “Illegal Encampments” [SO31], the scope of the areas covered by the injunction and whether the Council would act when there are absent or unknown landlords.  Officers reported that the injunction covered a large number of areas and was not limited to existing Council property, for example it included Commons which the Council had a duty to protect.  The map of the areas covered by the injunction had been published on the website and the intention was to make it more widely available to deter future encampments.

Officers confirmed that, where there was a request from a private landowner for support for the removal of illegal encampments was received, could be provided, however this would need to be recharged.  The landowner would also still be required, for example, to attend court to prove ownership.


It was noted that the Risk Management report covered operational risks as opposed to financial risks which were covered by the External Audit report.  The Corporate Director was satisfied that the financial risks were being sufficiently managed such that they did not need to form part of the Risk Management report.


RESOLVED that the current strategic risks be noted and in particular the reduction in likelihood of the risk of “Illegal encampments” [SO31] as detailed in the report.


Any other non-confidential business which the chair considers urgent

In accordance with S100b(4) of the Local Government Act 1972, amended by the Access to Information Act of 1985, no urgent business may be raised unless it has been approved by the Chair.  The item and reason for urgency must be announced at the start of the meeting.


There was none.


Dates of Future Meetings

Future meetings are scheduled to take place at 7.30pm at the Civic Offices, Elstree Way, Borehamwood, as follows:

·         30 May 2019

·         30 July 2019


The next meeting was scheduled for 30 May 2019 at 7.30pm.