Agenda and minutes

To receive Apologies for Absence from Committee members. 

There were no Apologies for Absence.

Councillor John Batchelor declared a non pecuniary interest as a Director of Ermine Street Housing Ltd.

To confirm the minutes of the meeting held on 31 July 2018 as a correct record.

The minutes of the meeting held on 31 July were confirmed as a correct record, subject to the inclusion of the following amendments to the reports made at that meeting:

·         The report at agenda item 4, was dated 25 June when it should have been dated 25 July.

·         The report at agenda item 6, was dated 31 August when it should have been dated 31 July.

·         The report at agenda item 7, was dated 31 August when it should have been dated 31 July.

The Principal Accountant introduced this report from External Audit, who were currently unable to state when their audit of the 2017/18 accounts would be completed. She explained that officers were liaising with External Audit regarding their queries on the trial balance, which needed to be addressed before the initial audit could be completed. It was noted that External Audit’s other queries, such as those regarding the fixed asset register and Section 106 payments, were technical questions that were not delaying the initial audit.

The Committee expressed disappointment at the fact that the audit had not yet been completed and the established timetable had not been adhered to. Concern was expressed at the implications of the delay. It was understood that 10% of Councils had not been able to get their accounts signed off by the deadline. It was noted that the Council would be charged extra for additional work carried out by the External Auditors due to the lateness in the signing off of the accounts.

It was understood that accountancy were a relatively small section, where absences mattered and the team were not fully staffed. The Interim Manager’s contract had expired before the preparatory work for External Audit had been agreed. Temporarily providing more resources was only a short-term solution and the plan was to fill the vacant positions with permanent staff. The way in which the accounts were compiled would have to be changed and it was hoped that the new Financial Management System, which had been adopted by the City Council, would assist the process in future years.

Councillor John Williams, Lead Member for Finance, agreed that changes were necessary to avoid a repetition in future years. The Committee were supportive of this.

Housing Revenue Account (HRA)

The Executive Director agreed to provide a written response regarding the £1.1 million variance regarding the HRA. It appeared that the Right to Buy was being slowly phased out. However, the Council were being cautious by assuming that it would still be in place in 2019.

The Executive Director explained that officers had a good working relationship with the External Auditors. In response to questioning the Head of Finance explained that External Audit should be in a position to take the audited accounts to the next meeting of the Committee in November.

The Committee NOTED the report.

The Head of Shared Internal Audit presented this report on the work of Internal Audit between March 2018 to September 2018.

Agency staff

It was noted that temporary staff had been employed by Internal Audit and a recent permanent appointment had been made. There was no conflict of interest between the employment of temporary staff and the audit of agency workers.

Working with External Audit

It was noted that Internal Audit and External Audit contacted each other regularly and shared information. Part of the work of External Audit included the auditing of Internal Audit and no concerns had been raised. The Head of Shared Internal Audit agreed to consider ways in which working with External Audit could assist the auditing of accounts in future years.

The Committee NOTED the report.

The Principal Accountant presented this report that invited the Committee to approve the draft Risk Management Strategy, which was unchanged from last year, but requires annual approval.

Minor amendments

It was suggested that the terms Gross Risk and Net Risk should be used exclusively instead of also referring to Inherent Risk and Current risk in paragraph 13 of the report and Appendix C.

It was requested that the term “Portfolio Holder” be replaced with “Lead Cabinet Member”.

It was agreed that the Scrutiny and Overview Committee should be included as one of the Groups that had roles and responsibilities in the Risk Management Process.

It was suggested that the description “Dead cert” for a risk that was inevitable was too colloquial for a Council policy and should be amended. The description was currently on 4Risk system and therefore it will need to be investigated if this could be changed. It was also suggested that it could be useful to have a flow chart, showing how various committees mitigated the risks.

The Principal Accountant agreed to distribute the draft Risk Management Process to the Committee, which was missing from the agenda.

Scrutiny of the risks on the Register

It was noted that in the past a summary of movement through the year in the scoring of strategic risks was presented to the Committee. It was explained that in light of the intention to overhaul the Strategic Risk Register, it had not been updated in the last few months. It was confirmed that the Strategic Risk Register was reviewed by the Scrutiny and Overview Committee and Cabinet. The Committee could rely on this as evidence of adherence to the Risk Management Strategy in the Council. It was noted that the companies controlled by the Council had their own Risk Registers.

Training from the Council’s insurer

It was noted that Councillors were being offered training on risk management by Zurich, the Council’s insurer on Tuesday 13 November from 3pm to 5pm. It was understood that the management of risk could affect the Council’s insurance premium.

Baseline risk

It was noted that the Council set a baseline risk of a loss of £50,000 before taking action. This threshold figure of £50,000 was used to determine whether a risk was assessed as a “noticeable effect” impact or “some limited disruption” impact.

Housing stock

The Executive Director explained that Council houses were not covered in the event of loss, as the risk was managed by having the stock in many locations throughout the District, making a number of losses very unlikely.

The Committee AGREED the draft Risk Management Strategy, with delegated approval to the Executive Director to make the minor amendments agreed by the Committee.

It was agreed that officers should respond to actions agreed in the minutes at the subsequent meeting.

Officer register of interests

The Deputy Head of Legal Practice explained that as a result of the Committee’s discussions on this matter, new staff were now informed of the need to declare interests on a central register, as part of their induction. It was noted that officers were bound by the Local Government Act 1972 and could face criminal sanctions for any breach.

Regulatory of Investigatory Powers Act (RIPA)

The Deputy Head of Legal Practice explained that the above powers had been used, but as the investigation was currently ongoing, this matter could not yet be reported.

Tuesday 20 November at 9:30am. 

It was noted that this was scheduled for Tuesday 20 November at 9:30am.