| Time: | 7.30pm | Place: | Committee Room 1, Council Offices, Gernon Road, Letchworth Garden City |
| PRESENT: | Councillor M.E. Weeks (Chairman), Councillor Julian Cunningham (Vice-Chairman), Councillor Bill Davidson, Councillor S.K. Jarvis (substitute) and Councillor David Kearns. |
| IN ATTENDANCE: | Andy Cavanagh - Head of Finance, Performance and Asset Management Tim Neill - Accountancy Manager Fiona Timms - Performance and Risk Manager Nigel Schofield - Committee and Member Services Officer Helen Maneuf - SIAS Head of Assurance Terry Barnett - SIAS Audit Manager |
| ALSO PRESENT: | John Robinson - Strategic Director of Customer Services (part-time). |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 36 |
APOLOGIES FOR ABSENCE Apologies for absence had been received from Councillors: John Booth, Lawrence Oliver and Ian Mantle, Norma Atlay, Strategic Director of Finance, Policy and Governance, and from Phil Westerman and Richard Lawson of Grant Thornton. In accordance with the agreed procedures Councillor Steve Jarvis advised the Chairman that he was substituting for Councillor Lawrence Oliver. |
Noted | ||
| 37 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 19 September 2013 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 38 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 39 |
CHAIRMAN'S ANNOUNCEMENTS The Chairman welcomed everyone to the meeting and reminded Members that, in line with the Code of Conduct, any Declarations of Interest should be declared immediately prior to the item in question. |
Noted | ||
| 40 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 41 |
THE ANNUAL AUDIT LETTER FOR 2012-2013 Introduction Report The Annual Audit Letter (Letter)for 2012-2013 from Grant Thornton was presented by the Head of Finance, Performance and Asset Management (HF).as Messrs Westerman and Lawson had tendered their apologies. The HF advised the Committee that the first publication of this agenda had included a draft version of the Annual Audit Letter for 2012-2013 and subsequently Members had received two additional versions prior to the meeting from Grant Thornton. The HF confirmed that a final version of this ‘Letter' had been sent by Grant Thornton three days before this meeting and apologised on behalf of the external auditors for the successive versions of the ‘Letter' none of which were final. The HF stated that he would update Members on the changes in the text in the final version. As the final version of the Annual Audit Letter had not been available to Members the Chairman enquired if the Committee wished to have the ‘Letter' tabled and presented by the Head of Finance, Performance and Asset Management. A Member immediately questioned that as Grant Thornton were not present whether the contract stipulated that Grant Thornton must attend each meeting of this Committee to present their reports and consequently if the Committee could receive the ‘Letter'. The HF advised that NHDC did not have sight of the contract as the agreement was between Grant Thornton and the Audit Commission but that it would be expected that the external auditor would present the outcomes of their work at a meeting of this Committee From the discussion that followed it was clear that whilst the report was positive and for noting as it should be a summation of information previously reported to this Committee, it was not acceptable to the Committee that Grant Thornton were not present and that there was extreme disappointment that three versions of the ‘Letter' had been received, none of which was correct. In response to a question the HF advised that any change of external auditors would not be possible until the current contract expired in 2017. The Chairman proposed that the Final Version of the Letter that was with the HF should be tabled and this was agreed, however the Committee were unanimous that the displeasure of the Committee at the conduct of Grant Thornton should be conveyed by the Strategic Director of Finance, Policy and Governance at the earliest opportunity. The HF advised the Committee of the changes to Version 3 of the ‘Letter'; 1.Page 5 - Delete Paragraph 3 as this information concerning The Finance Manager did not apply to NHDC; 2.Page 5 - Delete last sentence of Paragraph 4 - Value for Money as NHDC did not have a Shared Revenues and Benefits service; 3.Page 7 - Paragraph 5, first sentence, replace £3.090M by £6.0M of net recorded expenditure; 4.Page 9 - That all ratings for the four areas of review were at Green status for NHDC; 5.Page 12 - Paragraph 4, amend text to confirm that the Housing and Council Tax Benefits claim had now been completed by Grant Thornton and sent to the Department of Works and Pensions and that a correction in the order gave an additional £30K credit due to NHDC. The HF advised the Committee of the key findings from the audit of the 2012-2013 accounts and the Whole of Government Accounts, assessment of the Council's arrangements for securing economy, efficiency and effectiveness in its use of resources and the certification of grant claims and returns. The HF stated that the audit conclusions gave an unqualified opinion on the accounts which gave a true and fair view of the Council's financial position at 31 March 2013 and its income and expenditure for 2012-2013. There was an unqualified conclusion in respect of the NHDC arrangements for securing economy, efficiency and effectiveness in its use of resources and the HF confirmed that on 30 September 2013 Grant Thornton had issued an unqualified opinion on the Value for Money audit. and that there were no issues noted on the completed short form assurance on the Whole of Government Accounts. The HF confirmed that Grant Thornton had completed the National Non Domestic Rates claim and the Housing and Council Tax Benefit Claim and that the final Grant Certification Report would be presented to a future meeting of this Committee. The Chairman thanked the Head of Finance, Performance and Asset Management for the synopsis of the external auditors report and invited questions and comments from the Committee. The Committee were pleased to note the unqualified opinion on the accounts and the £30K credit due from the Housing and Council Tax Benefit Claim and Value for Money statements but this could not detract from the displeasure expressed by the Committee previously. RESOLVED: (1)That the information in the Annual Audit Letter for 2012-2013 and the amendments presented by the Head of Finance, Performance and Asset Management as stated in Version 4 of the Annual Audit Letter be noted; (2)That the confirmation of an unqualified opinion on the statement of accounts for 2012-2013 be noted and welcomed; (3)That the Strategic Director of Finance, Policy and Governance be requested at the earliest opportunity to convey to the Grant Thornton Engagement Lead the extreme disappointment and displeasure of this Committee as to the discrepancies contained in the three versions of the ‘Letter' and his non attendance at this meeting to present the Annual Audit Letter for 2012-2103 and explain the errors in the three versions of the ‘Letter' sent to the Committee prior to this meeting. REASON FOR DECISION: To note and agree the Annual Audit Letter for 2012-2013 with amendments notwithstanding the comments raised on the conduct of Grant Thornton. |
Agreed | ||
| 42 |
RISK MANAGEMENT UPDATE Report Appendix A Appendix B The Performance and Risk Manager (PRM) presented the report of the Head of Finance, Performance and Asset Management. The PRM advised the Committee that this report gave the current status of Cabinet and Senior Management Risks and that the Cabinet Risk of Waste and Recycling Service now had three sub risks viz. The New Waste Service; The Northern Transfer Station with Ancillary Facilities and Co-mingled Waste. The PRM advised the Committee that there was an ongoing risk with the contamination of co-mingled waste which affected the projected income from recyclates, and the Committee noted that there might be a legal challenge on the quality of glass emanating from co-mingled glass as opposed to kerbside sorted glass. The PRM proposed that a new sub risk for co-mingled recycling be established and that the new risk was presented in detail at Appendix A The PRM reminded the Committee that the Organisational Workload Risk had been set up in December 2011 and described the seven sub risks that were directly of indirectly affected by changes in legislation. A number of the sub risks were now managed at service level whereas other sub risks were included within Top Risks and for example the impact of The Localism Act was now included within the Sustainable Development of the District and Local Plan risks. Consequently the PRM proposed that this risk should be deleted as a Top Risk whilst recognising that the delivery of the Council's priorities with the expected reduction in resources was in itself a risk. However as the introduction of Universal Credit (a sub risk to Organisational Workload) had yet to take place due to slippage at national level the impact on NHDC was unknown and it was proposed to add a risk that was related to Welfare Reform. The PRM referred the Committee to Tables 1 and 2 which showed the current and proposed changes to Top Risks and to Appendix A which detailed the two new Top Risks of Co-Mingled Waste and Welfare Reform. The PRM referred the Committee to Appendix B which presented the revised Risk and Opportunities Management Strategy for 2013 to 2016 and to Table 3 which summarised the seven main changes to the Strategy of which three were additions, one was a replacement, two were insertions and one was an update. The PRM emphasised that it was essential to manage risk effectively at NHDC in order to maximise opportunities and minimise threats. It was also important for Managers to use project risk logs and that a specific template should be used when identifying a risk to NHDC and that the Strategy now included a table to assess the impact of a risk and a diagram explained the review process for Top Risks. The PRM confirmed that the Strategy required that all benefits from any project should be clearly shown and have good objective measures of achievements. The PRM concluded her presentation by stating that a summary of identified risks would be added to Covalent with the Project Risk Log but subject to a review by the Project Manager. The Chairman thanked The Performance and Risk Manager for the Risk Management Update and invited questions and or comments from the Committee. There ensued a lengthy debate on risks, the assessment of risks and significance of risks regarding: Churchgate, Recycling, New Payroll System, Welfare Reform and The Local Plan. Members questioned whether some risks were as significant as the rating within the Risk Matrices and the likelihood of the risks being once a year probability or several times a year probability. The PRM advised that all risks assessments were a balance of technical and financial considerations and for example the possibility of reverting to kerbside collection of recyclates was a remote risk but had to be listed. A Member suggested that the New Payroll Risk should not have such a high probability assessment as this must be implemented by April 2014. The Chairman invited the Strategic Director of Customer Services (SD) to reply and the SD stated that there been delays in the determination of the final costs of the SERCO offer that had just recently been resolved. It would not now be possible to run a dual payroll system for March the year end as was originally planned. The SD advised that the New Payroll System was a reasonable and controlled risk and that SMT were very aware of the effects of not having the new payroll system in operation at 1 April 2014. A Member questioned whether the Churchgate Risk merited a 2/2 score and was it a more significant risk? However the majority of the debate concentrated on the new proposed SMT Top Risk of Welfare Reform and the PRM confirmed that there was always the opportunity to challenge any risk assessment and that it was important to review the risk description and that Appendix A described in detail the Risks for Co-mingled Waste and Welfare Reform. A Member suggested that this risk should be re - assessed as there had been a lot of slippage at national level and that Universal Credit may not be fully introduced until 2017 and the PRM stated that Universal Credit was only one aspect of this new risk. However, the PRM agreed to consult with the Head of Revenues and Benefits to reconsider the assessment of this risk. It was noted that there were constant and ongoing changes to risks and that the information presented to the meeting was completed several weeks to this meeting and the Head of Finance, Performance and Asset Management confirmed that all Heads of Service had to review the risks and the risk assessment. A Member requested confirmation that within Appendix B - Risk and Opportunities Strategy for 2013-2016 Table 8 where there was requirement for a review of the Terms of Reference for the Risk Management Group and the PRM advised that there were no changes required. RESOLVED: (1)That the proposed change to the Cabinet Waste and Recycling Risk by the addition of a sub risk concerning co-mingled recycling be agreed; (2)That the proposal to delete the Senior Management Team risk of Organisational Workload be agreed; (3)That the assessment for the new Senior Management Team risk related to benefit reforms ‘ Welfare Reform' be reviewed by the Head of Revenues and Benefits and more detail be provided about the management of the risk by Housing Services; (4)That subject to reference being made to the new Priorities effective from 1 April 20914 being made the Risk and Opportunities Management Strategy for 2013 - 2016 as presented at Appendix B be agreed. RECOMMENDED TO CABINET: (1)That the proposed change to the Cabinet Waste and Recycling Risk by the addition of a sub risk concerning co-mingled recycling be endorsed by Cabinet; (2)That the revised Risk and Opportunities Management Strategy for 2013- 2014 with amendments be endorsed by Cabinet. REASON FOR DECISION: To note and approve changes to the Risk Matrix and the Risk and Opportunities Management Strategy for 2013 - 2016 and advise Cabinet of such changes. |
Agreed | ||
| 43 |
NORTH HERTS DISTRICT COUNCIL - SIAS UPDATE ON PROGRESS AGAINST THE 2013 - 2014 AUDIT PLAN Introduction Report The SIAS Audit Manager(AM) presented the report of the SIAS Head of Assurance and was pleased to advise the Committee that there were no ‘Limited Assurance' and ‘No assurances' for presentation in this reporting period. The AM advised that at 8 November 2013 48 per cent of the 2013-2014 Audit Plan days had been delivered and that at Appendix A there was a status update on each individual project within the Audit Plan. The Committee noted that since the last meeting of this Committee held on 19 September 2013 five audits were completed viz. Green Space Management Strategy, Area Committee Grants, Assets of Community Value, Safe Staffing and Parking Enforcement. The AM updated the Committee that since the compilation of this report the audit reports: Partnerships and Community Partnerships had been issued as Final. The AM proposed that the planned Procurement Audit should be deferred to 2014-2015 in light of the Procurement Challenge currently undertaken by the East of England Local Government Association and that the 12 days for this audit would be re allocated in the 2013-2014 Audit Plan with seven days being used on a review of the new BACS software review and five days returned to the contingency budget. The AM reminded Members that at the meeting held on 19 September 2013 (Minute 29 refers) Members requested that there should be an increase in the accuracy of profiling and thus the performance data for client committees and that SIAS was seeking to develop this further as part of the 2014-2015 audit planning process. The AM stressed that there were a number of factors that could affect the accuracy of profiling: competing pressures for management, unexpected staff absences and client slippage which would require a flexible approach from each party. There would be profiled targets for ‘Planned Days' and ‘Planned Projects' with planned days currently at 48 per cent against a profiled target for 7 months of 58 per cent. The AM referred the Committee to the table at Paragraph 2.10 and the three options for profiling and to the table at Paragraph 2.13 and the four options for performance indicator targets. Following clarification by the AM of each option the Committee agreed to select Option 2 - Profile based on ‘judgement' which was the best estimate as to a reasonable expectation of progress against the SIAS work plan and Option 1 - Planned Days - percentage of actual billable days against planned chargeable days completed (excluding unused contingency). With regard to Planned Projects and in terms of progress against the projects in the audit plan there had been 11 projects completed. SIAS had full confidence in delivering the five projects that were in field work or in quality review and a good level of confidence in delivering the 16 audits where a scope and start date had been agreed. The AM confirmed that three of four audits listed as being without a formal start date had now been started with one audit still to be programmed and there was one deferred (Procurement - see above). The AM was pleased to advise the Committee that there was 100 per cent client satisfaction with conduct of the audits and that the number of agreed high priority audit recommendations at 8 November were at 100 per cent. The AM referred the Committee to Appendix A and B which detailed Progress against the 2013-2014 Audit Plan at 8 November 2013 and the implementation status of high priority recommendations respectively. The Chairman thanked the SIAS Audit Manager for the update and progress against the Audit Plan at 8 November 2013 and invited comments and or questions from the Committee. Members agreed that there had been improvement in the presentation of data that related to progress in the delivery of the audit plan by SIAS. In response to a question the AM advised that it was unlikely that there could be any benchmarking comparisons of audit plans as the content of each SIAS client's plan was different. The AM also advised that the targets for completion of audits within the NHDC Audit Plan would be met. With regard to potential audits for 2014 - 2015 a Member enquired if the next audit plan could include an audit of Recharges investigating the principles, processes and logic of recharging at NHDC due to the changing circumstances in this local authority. RESOLVED: (1)That the Internal Audit Progress Report for the period up to 8 November 2013 be noted; (2)That the proposed amendments to the Audit Plan as at 8 November 2013 be agreed; (3)That the proposal to remove four implemented high priority recommendations as detailed at Appendix B be agreed; (4)That the presentation of audits be as follows: Profiling: Based on judgement, the best estimate as to a reasonable expectation of progress on the audit plan. Planned Days: The percentage of actual billable days against planned chargeable completed days but excluding any unused contingency; (5)That the Audit Manager be requested to consider the inclusion of an internal audit in 2014-2015 on Recharges at North Herts District Council and to specifically investigate the principles of recharges, processes and logic in light of the recent organisational changes within NHDC. REASON FOR DECISION: To note and support the changes to the Internal Audit Plan and seek completion of audits within the 2013-2014 Audit Plan. |
Agreed | ||
| 44 |
NORTH HERTS DISTRICT COUNCIL - PARKING ENFORCEMENT 2013 - 2014 FINAL REPORT Introduction Report The SIAS Head of Assurance (HA) reminded the Committee that this audit had not been included in the Audit Plan for 2013-2014 but had been covered by contingency at the request of the Committee at the meeting held on 13 June 2013 (Minute 9 refers). For the record the Chairman advised the HA that the request for an audit had included obtaining assurance that the appeal process against a Penalty Charge Notice was being achieved in a timely manner. The HA was pleased to confirm that this assessment had been included in the Parking Enforcement Audit and the final audit report. The Head of Assurance was pleased to advise the Committee that the outcome of this audit was a substantial assurance opinion and that there were satisfactory controls in place to process, monitor and recover unpaid Penalty Charge Notices (PCNs). The HA confirmed that discounts and charges were applied in accordance with the Council's policies and procedures. The Head of Assurance advised the Committee that there were three recommendations classified as ‘merits attention' priority and that the management action plan was presented at Appendix A. The HA described to the Committee the main recommendations from this audit for: The enforcement of PCNs charges and PCN debt management and write offs (with two ‘merits attention'). With regard to PCN appeals and cancellations the HA stated that ten sample appeal cases were tested and that all procedures for recovery were completed satisfactorily. The Head of Assurance concluded her presentation by advising the Committee that the MSU office procedures manual that dated from 2004 required updating and the MSU Manager confirmed that the manual updating was within the 2013-2014 work programme and was expected to be completed by 31 July 2014. The HA confirmed that although the PCN write offs had not historically been approved in accordance with the NHDC procedures a decision had been made in September 2013 to include such sums as part of the monthly process and were sent to the Head of Revenues, Benefits and IT. The Chairman thanked the HA for the presentation of the outcomes of the Parking Enforcement Audit, an excellent report, and invited questions and or comments from the Committee. A Member referred to Appendix A and PCN Debt Management and Write Offs and whether NHDC or other neighbouring authorities had ever produced an Annual Report on Enforcement. The HA advised that it was not known if other neighbouring authorities had done so as per the guidelines issued by the Department of Transport but that the Contracts and Project Manager would be preparing such a report by March 2014 and that the Performance and Risk Manager would be tracking this report and its findings. On advice from the Strategic Director of Customer Services the Committee noted that there was not one specific officer in charge of all aspects of parking. RESOLVED: (1)That the results of the NHDC Parking Enforcement Audit be welcomed and noted; (2)That the actions required by officers to meet the recommendations as listed at Appendix A and the target completion dates be noted; (3)That the officers undertaking the Parking Enforcement Internal Audit be thanked for the comprehensive report. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee assess and review the Parking Enforcement Audit. |
Noted | ||
| 45 |
SECOND QUARTER REVENUE BUDGET MONITORING 2013 - 2104 Report Appendix A The Accountancy Manager (ACM)presented the report of the Strategic Director of Customer Services and advised the Committee that this report was in draft format prior to presentation to Cabinet on 10 December 2013 and was the summary position on income and expenditure for the General Fund in July to September 2013. The report also contained the significant variances on the working budget and the impact on the base budget for 2014-2015. Using the traffic light system the report gave details of the carry forward balances and efficiencies approved for 2013-2014. The ACM confirmed that there would no changes to this report. The ACM referred the Committee to Section 8 which described the issues and further cross reference to Tables 1,2,3,4,5,6 and 7 and described in succession: Significant Changes to the General Fund, Progress of Carry Forward Budgets, The 2013 - 2014 Efficiency Proposals with variances identified, Key Corporate ‘Health' Indicators, Projected General Fund Balances at 31 March 2104, The approved Minimum General Fund Balance and the Earmarked Reserves for 2013-2014 with a projected total of £3.457 M at 31 March 2014. The Committee noted that there were a number of earmarked reserves that could be used to fund revenue expenditure as listed in Table 7 and that the General Fund was greater than forecast. These reserves could be used over the medium term for ‘invest to save' projects to change the way services are delivered and reduce the annual general fund net expenditure. The ACM advised the Committee that the General Fund net expenditure forecast for 2013-2014 had risen by £60K compared to the original budget, to a total of £16.753M and this was a net decrease of £236K in the working budget. Of the carried forward sum of £489K a total of £146K had been spent by the end of the second quarter and that the projected efficiency savings of £850K for 2013-2014 had risen to £856K by year end. The ACM confirmed that the income from Building Control fees applications had reduced on the same period last year - 416 compared to 454 in the same period and conversely the non fee earning applications had increased from 2,559 to 3,882 in the same period with a projected income reduction of £84K at the end of the second quarter in 2013-2014. The ACM stated that it was necessary to use a contribution for the Building Control earmarked reserve in 2013 - 2014 to neutralise the impact on the general fund. The Committee noted that the Head of Development and Building Control was investigating possible service co-operation within Hertfordshire. The ACM also stated that the number of local land charges searches had increased in this quarter compared to last year was ahead of profile. In response to a question concerning Careline and the planned delivery of efficiencies the ACM advised that there had been a different assessment process and delay to investment would affect the receipt of additional income for at least six months. The appointment of the Marketing Officer had been delayed until January 2014 and that no additional revenue would be achieved in 2013-2014. Another Member questioned the proposed Special Reserve of £800K and the ACM advised that this reserve would keep the General Fund at £2.3M and the Head of Finance, Performance and Asset Management (HF) stated that the reserve could be used to fund ‘Invest to Save' initiatives, or unavoidable fluctuations in contract prices at renewal, and represented a prudent accounting measure. With reference to Table 1 and the final item of Cost of Democracy - Printing a Member suggested that the overall Costs of Democracy including the reported additional costs incurred due to the stated increase in colour prints placed in Committee Agenda should be revisited and the HF agreed to check the costs of printing again. The Chairman thanked the Accountancy Manager for the comprehensive second quarter update on Revenue Budget Monitoring and that Members comments should be taken into account for the next updating report. RESOLVED: (1)That the information within the draft Second Quarter Revenue Budget Monitoring Report for 2013-2014 be noted; (2)That the decrease in expenditure of the 2013-2104 General Budget of £263K be noted; (3)That the increase in net expenditure of the 2014 - 2015 General Fund budget of £33K be noted; (4)That the Head of Finance, Performance and Asset Management be requested to revisit the Costs of Democracy Budget and Efficiencies prior to the third quarter Revenue Budget report. REASON FOR DECISION: To provide the Finance, Audit and Risk Committee with the opportunity to review and if appropriate comment on the Second Quarter Revenue Budget report for 2013-2014. |
Noted | ||
| 46 |
SECOND QUARTER CAPITAL BUDGET MONITORING 2013-2014 Report Appendix A Appendix B Appendix C The Accountancy Manager (ACM) presented the report of the Strategic Director of Customer Services and advised the Committee that this report was in draft format prior to presentation to Cabinet on 10 December 2013. The ACM advised the Committee that the purpose of the report was to update Cabinet on the capital programme for 2013 - 2014 at 30 September 2013 and the impact upon the 2014 - 2014 programme and upon available capital funding resources and to seek Cabinet's approval to changes to individual scheme expenditure for 2013-2014 onwards and as detailed at Appendices A, B, and C. With reference to Table 2 and the purchase (and long leasehold on Letchworth Garden City Heritage Foundation land) of the District Council Offices the ACM advised the agreed price was £3.65M which included stamp duty. The ACM advised the Committee that the costs stated in Table 2 for the Roof replacement at Royston Civic Centre related to the NHDC owned element of the building. In response to a question on the costs for the refurbishment of Hitchin Swim Centre whether there would be any savings on this ‘Invest to Save' project the ACM confirmed that a limit of £1.1M had been agreed with Stevenage Leisure Limited with the actual cost now set at £1.05M. This scheme's objective was to spend capital in order to save on revenue costs. NHDC had used set aside capital receipts which would be paid back over 120 months at a very good rate of interest. There ensued a short debate on ‘Invest to Save' projects and the Hitchin Swim Centre in particular. A Member questioned whether the cost of this redevelopment had been underestimated. Whilst accepting the value of Invest to Save, Members expressed reservations over the current financial statements regarding Hitchin Swim Centre and it was agreed that the Head of Leisure and Environmental Services should be invited to the next meeting of FAR to be held on 27 January 2014 and present a more detailed report of this ‘Invest to Save' Scheme and the Hitchin Swim Centre Car Park extension which had been delayed. The Chairman thanked the Accountancy Manager for the presentation and responses to questions and requested that the Head of Finance, Performance and Asset Management should advise the Head of Leisure and Environmental Services of the concerns of the Committee regarding the Invest to Save scheme at Hitchin Swim Centre. RESOLVED: (1)That the information in the Second Quarter Capital Monitoring report for 2013- 2014 be noted; (2)That the proposed decrease in expenditure in 2013-2014 of £1.043M be noted; (3)That the proposed changes to capital schemes with an increase of £583K be noted; (4)That the Head of Leisure and Environmental Services be requested to present a more detailed report on the ‘Invest to Save' scheme at Hitchin Swim Centre and the extension to the Swim Centre Car Park to the next meeting of the Finance, Audit and Risk Committee on 27 January 2014. REASON FOR DECISION: To provide the Finance, Audit and Risk Committee with the opportunity to review and if appropriate comment on the Second Quarter Capital Budget report for 2013-2014. |
Noted | ||
| 47 |
SECOND QUARTER TREASURY MANAGEMENT MONITORING 2013-2014 Report Appendix A The Accountancy Manager (ACM) presented the report of the Strategic Director of Customer Services and advised the Committee that this report was in draft format prior to presentation to Cabinet on 10 December 2013. The ACM stated that the report included Treasury Management activities at the end of September 2013 and performance against the Prudential and Treasury indicators. This report was supported through dialogue with the Authority's Cash Managers (Sterling and Tradition) and regular meetings with Sector - Treasury Advisors. The ACM advised that £0.165M of interest at the end of September 2013 with average rates on all investments was 1.07 per cent with an average rate of interest of 1.57 per cent on outstanding investments at the end of September. Although the Council had a variety of exposed risks i.e. Credit Risk, Liquidity Risk and Market Risk the last months had proved difficult to find counterparties who would pay a reasonable return on cash investments in either the long or short term. By reference to Appendix A - Sector Treasury Management Update which advised that one reason for the lower rates could be the reduced demand for Local Authority funds due to the extension to January 2015 of the Government ‘funding for lending' scheme. The ACM concluded his presentation by stating that £11.5m was invested for longer than 364 days (maximum of £20M) and that two deals had been placed during the second quarter totalling £3.75M and longed than 365 days. The Chairman thanked the Accountancy Manager for the presentation and updating and invited questions and or comments on the NHDC Treasury Management Strategy and investment returns. A Member enquired if it could be possible to share Treasury Management Investments with other authorities in Hertfordshire or organisations in North Herts as the combination of funds might achieve better rates of interest. The Head of Finance, Performance and Asset Management (HF) replied that there could be some potential but it would be essential that all treasury management strategies were aligned, also that conversations with counterparts in other local authorities had suggested that there might be an opportunity to use property funds in a pool. The HF considered that it could be difficult to achieve higher rates elsewhere as NHDC had some of the best investment rates in Hertfordshire. Also, that joint investment with The Heritage Foundation, North Herts Homes and North Herts College would not be possible as there was different legislation governing these bodies and if there were any joint investments the rates would have to be greater than currently received by NHDC. There was a short discussion on the value of the Sector report in terms of investment advice, was it value for money, was there any value for NHDC. The ACM confirmed that NHDC received daily updates on rates, weekly investment letters and quarterly meetings. The HF confirmed that the Sector report might well be an efficiency candidate next year and that he would keep the Committee informed on Treasury Management issues. RESOLVED: That the information in the Second Quarter Treasury Management report for 2013-2014 be noted. REASON FOR DECISION: To provide the Finance, Audit and Risk Committee with the opportunity to review and if appropriate comment on the Second Quarter Treasury Management report for 2013-2014. |
Noted | ||
| 48 |
CORPORATE BUSINESS PLANNING - BUDGET FOR 2014-2015 Report Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7.A Appendix 7.B Appendix 7.C Appendix 8 The Accountancy Manager (ACM) presented the report of the Strategic Director of Finance, Policy and Governance and advised the Committee that this report was in draft format prior to presentation to Cabinet on 10 December 2013. The ACM advised the Committee of one change at Paragraph 8.7 to confirm that income from the Hertfordshire Waste Partnership could increase in 2014-2015 but this income stream was less certain in future years. The report included the draft budget papers for 2014-2015 which in turn would lead to the calculation of the District Council Tax Level which would be determined at the meeting of Council on 13 February 2014. The ACM stressed that all draft budget proposals were based on the latest information available and were provisional figures and more work was required to refine the estimates. The estimated net budget for 2014-2015 was £16.4M which was a net reduction of £400K on the working budget for 2013-2014. The ACM reminded Members that two budget workshops had been held in September and November 2013 for each political group and the outcomes were presented at Appendix 7. The ACM described the nine recommendations that would be made at the meeting of Cabinet and referred the Committee to the Executive Summary at Paragraph 8 where it was anticipated that Government funding would fall by 25 per cent (£1.6M) over the next four years, with a proposed minimum general fund of £2M and earmarked reserves of some £3.5M at 31 March 2014. The ACM advised the Committee that the expenditure reduction and income generation proposals for 2014- 2015 stood at £1.036M. The ACM referred the Committee to Tables 1 to 8 which detailed: Estimated Government Funding for 2014-2015 onwards; Analysis of Government Grants; Budget Risks for 2014-2015; Other Reserves and Provision from 2013-2014; Capital and Revenue Investment Key Factors; Efficiencies arising from decisions taken; Estimated Employee budget from 2009-2010 to 2014-2015; and the breakdown of the Average Band D Council Tax in 2013-2014. The ACM next referred the Committee to Appendices 1 to 8 which provided much more detail on the draft budget for 2014-2015 and how the estimates were drawn up. The ACM advised the Committee that the Autumn Statement by the Chancellor of the Exchequer toady had yet to be analysed in full as to the final settlement for Local Government but the cap on the increase of NNDR rates would mean less income and it was uncertain if Central Government would make up this shortfall. The ACM emphasised again that all the financial details for the 2014-2015 budget were estimates and were likely to change once the provisional settlement was received and also once the Leisure Management Contract had been awarded. This was a separate item on the Cabinet Agenda for 10 December. It was apparent to the Committee that this budget was not sustainable for 2014-2015 without an increase in Council Tax and the ACM referred the Committee to Appendix 1 which detailed the budget with no increase in Council Tax and to Appendix 2 which presented a budget for a 1.9 per cent increase in Council Tax in each of the next five years. Bearing this in mind the Committee agreed to propose to Cabinet that a Council Tax increase of 1.9 per cent should be recommended to Council for the budget in 2014-2015, although it was noted that this proposal did not necessarily suggest that such an increase in Council Tax in future years may not be appropriate. A Member questioned the need for Special Reserves projected to the end of 2018-2019 which were higher than last year. The Head of Finance, Performance and Asset Management advised that Special Reserves were used to avoid an over allowance on risks and were intended ‘to smooth out higher peaks in expenditure', and the impact this would have on Council Tax. Other earmarked reserves were for a specific purpose but the special Reserve was for ‘invest to save' and to help cover significant variations to major contracts. The Chairman thanked Members and Officers for their contribution to the debate on the Corporate Business Planning Budget for 2014-2015 and it was agreed that meeting this budget would be difficult and that extra costs were likely and that perhaps in 2015-2016 onwards serious consideration would have to be made on the cessation of services. RESOLVED: (1)That the information provided in the Corporate Business Planning Draft Budget report for 2014-2015 be noted; (2)That the change to Paragraph 8.7 concerning income from Hertfordshire Waste Partnership be noted. RECOMMENDED TO CABINET: That due consideration should be given to an increase of 1.9 per cent in Council Tax for 2014-2015 and subsequently referred to Council for adoption. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee the opportunity to review, comment and make suggestions towards the budget planning process for 2014-2015. |
Agreed | ||
| 49 |
FUTURE MEETINGS - POSSIBLE AGENDA ITEMS There were no suggestions for agenda items at future meetings other than as requested at Minute 46 above concerning the request for a report on Hitchin Swim Centre. |
Agreed | ||