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Agenda and minutes

Venue: Committee Rooms A, Civic Offices, Elstree Way, Borehamwood

Contact: Allan Siao Ming Witherick  020 8207 7806

Items
No. Item

427.

Membership

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

Minutes:

Councillor C Barker substituted for Councillor P Hodgson-Jones.

428.

Communications and Apologies for Absence

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

(b) Apologies for absence.

Minutes:

Apologies for absence had been received from Councillor P Hodgson-Jones.

 

Councillor J Graham had given apologies for lateness in advance of the meeting.

 

It was reported the Mr Brittain and Ms Johns who had previously represented the External Auditors, EY, had been replaced by Mr N Harris and Mr L Cayetano respectively.  The Committee gave their thanks for their work.

429.

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.

 

Sponsorship

 

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.

 

Contracts

 

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.

 

Land

 

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

 

Licences

 

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.

 

Securities

 

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.

 

Minutes:

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

430.

Minutes pdf icon PDF 102 KB

To approve and sign the ATTACHED minutes of the meeting of the Committee held on 24 October 2019.

 

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

Minutes:

RESOLVED that the minutes of the meeting held on 24 October 2019 were approved and signed as a correct record.

431.

Progress Report - Shared Internal Audit Services (SIAS) pdf icon PDF 584 KB

The ATTACHED report provides the Committee with:

a)    the progress made by the Shared Internal Audit Service (SIAS) in delivering the Council’s 2019/20 Internal Audit Plan as at 17 January 2020,

b)    changes to the 2019/20 Audit Plan,

c)    the implementation status of previously agreed audit recommendations,

d)    an update on performance management information as at 17 January 2020.

Minutes:

The Shared Internal Audit Service (SIAS) submitted a report to the Committee detailing progress made by SIAS on: delivery of the Council’s 2019/20 Internal Audit Plan as at 17 January 2020; proposed amendments to the 2019/20 Internal Audit Plan; status of audit recommendations and an update on performance management information as at 17 January 2020.

 

The Committee was informed that SIAS were slightly behind on projects, although there were a number close to delivery which would bring things back on track.  This partially reflected the large number which were linked to financial systems and therefore skewed towards the end of Quarter 3 and 4.

 

The Building Control review had taken a while to be fully scoped as this had been commissioned on behalf of the seven partner councils.  The audit of Community Infrastructure Levy (CIL) Spend had been deferred to 2020/21 as CIL had recently been subject to audit in 2019/20 and other changes were still bedding in.

 

The appendix detailed all of the audit outcomes including the high and medium recommendations.  The CCTV outcomes were included for the final time as these had all now been completed.  Details had also been included in a calendar format to show where the audits were against their start dates.

A Member requested that an update on all of the findings, including those marked low priority, was given on the Governance of Council Owned Companies audit.

 

The Committee noted that there was a high level of satisfaction with the service.  The Internal Auditor responded that a 1-5 scale was used in a survey sent to the Head or Service of Service Manager who had been dealing with the review.  Where standards were not met they did seek additional feedback.

 

RESOLVED that the information contained in the Shared Internal Audit Service progress report (A/20/01) be noted and the amendments to the Audit Plan be approved.

432.

New Accounting Standards and Review of Accounting Policies pdf icon PDF 128 KB

To receive a report, ATTACHED, 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 2019/20.

Additional documents:

Minutes:

The Committee received a report updating on changes since the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for 2019/20.  There were fewer changes compared to previous years with additional clarifications over areas such as accounting for apprenticeship levy which the Council had already implemented in the 2018/19 financial year.

 

CIPFA and EY have provided updates to (International Financial Reporting Standard) IFRS16 with regards to the treatment and designation of leases.  IFRS 16 will be introduced in the 2020/21 Code of Practice for accounting periods beginning 1 April 2020.  This would have potential implications where “embedded leases” existed, for example where there was a partnership agreement to provide a service and the lease contract could be passed back to the council should the agreement cease.  It had been recognised that this would lead to additional work.

 

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 2019/20 and referred to throughout the report.

 

RESOLVED that:

1.    That the Audit Committee note the key accounting changes and implications of the revised 2019/20 edition of the CIPFA Code of Practice (as set out in report paragraph 5.1 of the report).

2.    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 notes the updates on IFRS 16 lease accounting which is scheduled to commence for the accounting period beginning 1 April 2020 and

4.    That the Audit Committee agrees that in all other respects the existing accounting policies remain unchanged for the purposes of the 2019/20 Statement of Accounts.

[At 8.05 pm Councillor J Graham joined the meeting during the next Item.]

433.

Treasury Management Strategy Statement 2020/21 and Prudential Indicators 2020/21 to 2022/23 pdf icon PDF 168 KB

The ATTACHED report provides the Committee with the:

a)    Treasury Management Strategy 2019-2020 and prudential indicators 2019/20 to 2021/22.

b)    Minimum Revenue Provision (MRP) policy statement set out in paragraph 4.5 of the Treasury Management Strategy 2020/21 (Appendix 1)

c)    Annual Investment Strategy set out in section 6 of the Treasury Management Strategy 2020/21 (Appendix 1)

For review prior to recommendation to Council for approval.

Additional documents:

Minutes:

The report provided the Committee with details of the proposed Treasury Management Strategy for 2020/21 and the prudential indicators for the years 2020/21 to 2022/23.  This would be put to Council in February with the mid-term report which had been received at the July 2019 meeting of the Audit Committee.

 

Officers noted that, with the change last year to the European Union Markets in Financial Instruments Directive (MIFID), 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.  This required that the decision was reviewed on an annual basis and agreed.  The Committee confirmed that they wished this to continue.

 

The Council continued to operate at a low risk with minimal borrowing.  Officers were reviewing the Council’s Treasury Management Practices with regards to commercial activities and non-treasury investments.  These would be brought back to the Committee later in the year.

 

The Council continued to have a negative borrowing position, benefiting from a net return on investments, however it was recognised that this would change.  It was currently more financially advantageous to borrow internally rather than to borrow to invest.  The maximum current borrowing limits therefore reflected the options available for when the council chose to borrow.  The Council criteria for investments as a whole broadly remained: Security, Liquidity, Return.

 

The Committee discussed the information available and whether to hold a training session prior to the next Audit Committee meeting in March.  Officers agreed to schedule this with the invitation extended to all Members with an emphasis on those engaged with the Council’s owned companies.

 

With the change in the corporate structure the potential appointment of a Section 151 Officer, separate from the Managing Director to minimise risks and conflict and balance workloads, was raised.  It was recognised that some councils separated out statutory roles, others had a combined post and that both options had been shown to be viable when audited.  The Committee asked that an update on the arrangements be given to the next meeting.

 

RESOLVED that:

1)    The content of the Treasury Management Strategy 2020/21 and Prudential Indicators 2020/21 to 2022/23, attached at Appendix 1, be recommended to Council for approval.

2)    The Minimum Revenue Provision (MRP) policy statement, detailed in paragraph 4.5 of the Treasury Management Strategy 2020/21, be recommended to Council for approval.

3)    The Annual Investment Strategy, set out in section 6 of the Treasury Management Strategy 2020/21, be recommended to Council for approval.

4)    That the Council should continue to elect to act as a professional client for the purposes of the European Union Markets in Financial Instruments Directive (MIFID).

434.

Risk Management Progress Update pdf icon PDF 153 KB

This report reviews and updates the Strategic Risks facing this Authority.

Additional documents:

Minutes:

The Committee received a report reviewing and updating the strategic risks facing the authority.  The details of the risk, impact and internal controls for the “Local Plan” [SO31] and “Supply of Affordable Social Housing & Homelessness” [SO01] which had been requested at the previous meeting were also included.  Members queried the change in status of [SO01] and whether this was realistic as some of the potential controls such as the Crown Road development, Let with Hertsmere and HDL were still in progress and so potentially difficult to measure.  Officer agreed to take back the concerns and review [SO01] and provide a further update for the next meeting.

 

A Member noted that a number of the risks were now in box 12 (3/4 Likelihood and 3/4 Impact).  This included risks such as “Cyber Risks” [SO23] which they had expected to be in the higher risk red areas.  Officers responded that cyber risks which were covered by [SO23] had been recently reviewed by Internal Audit who had provided a level of reassurance.  “Data Protection & Information Management” [SO11] was also due to be reviewed by Internal Audit later in the year and a Data Protection Officer was now in place.  A Scrutiny Topic Group had been commissioned by the Policy Review Committee and it would be touching on these subjects.

 

A query was raised with regards to “Collection of Housing Benefits Overpayments” [SO24] and where Council Tax and bad debts sat within this.  Officers responded that there had been improvements due to real time reporting which had reduced overpayments and the period that the individual was over paid.  Council tax was dealt with at service level as the Risk Register covered only those which were of significant or corporate concern.  A scrutiny in to debt generally had been recently completed and the council had increased the number of officers involved in debt recovery.  Any debts due to be written off under £5,000 from any department were reviewed by the Head of Finance & Business Services and above this was sent to the Executive for approval.

 

Officers responded that the “Workforce Capacity” [SO14] risk was partially due to turnover, but also the disproportional impact of being a smaller authority with a low head count close to London.  Work to improve resilience was being undertaken through the use of things such as partnership working and internal training.  The Committee asked for information on the level of turnover by service to come to the next meeting.

 

RESOLVED that the current strategic risks be noted and in particular the following amendments and additions as detailed in the report:

-       No risks had been added or withdrawn.

-       The reduction in likelihood of the risk of “Supply of Affordable Social Housing & Homelessness” [SO01].

435.

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.

Minutes:

There was none.

436.

Dates of Future Meetings

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

·         30 March 2020

·         27 May 2020

·         30 July 2020

Minutes:

The next meeting was scheduled for 30 March 2020 at 7.30pm.

It was agreed that a training session would be run before the next meeting.