| Time: | 7.30pm | Place: | Committee Room 1, Council Offices, Gernon Road, Letchworth Garden City |
| PRESENT: | Councillor M.E. Weeks (Chairman), Councillor John Booth (Vice-~Chairman), Councillor Clare Billing, Councillor Paul Clark (substitute), Councillor Jim McNally and Councillor Deepak Sangha. |
| 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 |
| ALSO PRESENT: | Terry Barnett - Audit Manager - SIAS David De Smet - Principal Auditor - SIAS Phil Westerman - Grant Thornton Observer: Scott Pow - Senior Auditor - SIAS |
| Meeting attachment |
Agenda Front Sheet |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 16 |
APOLOGIES FOR ABSENCE An apology for absence had been received from Councillor Steve Jarvis and in accordance with NHDC regulations Councillor Paul Clark advised the Chairman that he would be a substitute for Councillor Jarvis. An apology for absence had been received from Norma Atlay - Strategic Director for Finance, Policy and Governance. |
Noted | ||
| 17 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 23 June 2014 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 18 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 19 |
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. The Chairman also welcomed Phil Westerman from Grant Thornton and Messrs Terry Barnett, David De Smet and Scott Pow (observer) from SIAS. The Chairman welcomed Councillor Jim McNally to his first meeting of this Committee. |
Noted | ||
| 20 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 21 |
FINANCE, AUDIT AND RISK COMMITTEE - ANNUAL REPORT FOR 2013-2014 Introduction Report The Chairman of this Committee Councillor M.E. Weeks presented the Annual Report for 2013-2014 and thanked all Members and officers for their contributions and support in the last Civic Year and in particular to the previous Vice Chairman - Councillor J. Cunningham. The Chairman reminded Members that this Committee reported to Cabinet and provided assurance to Cabinet and Council on the annual accounts, risk management, governance and internal control. The Chairman was pleased to advise the Committee that the review of FAR for its effectiveness by SIAS had been successful. The Committee had met five times in 2013-2014 and covered a good range of topics in addition to the core items of: Reports of the External Examiner, Internal Audit Reports, Risk Management Updates and Financial Monitoring. The Chairman highlighted the main achievements of the Committee in the last 12 months with a successful overview of internal control and governance, a key role in financial monitoring with an Assurance Statement from the Chairman in support of the Annual Governance Statement. Additional reports were presented on Hitchin Churchgate, the cancelled Shared Services project with Stevenage BC and East Herts Council and the Hitchin Swim Centre development. The Committee requested an internal review of car parking charges which received a substantial level of assurance, together with a review of the use of surplus income from car parking charges and fixed penalty notices. Also, the Committee investigated the possibility of investing in Housing Associations as part of the NHDC Investment Strategy but were advised that the expected income did not make an attractive proposal. The Chairman proposed and it was agreed that this Annual report should be presented to Council for endorsement. The Vice-Chairman on behalf of the Committee thanked the Chairman for his report RESOLVED: That the Annual Report from the Chairman of the Finance, Audit and Risk Committee for 2013-2014 be noted. RECOMMENDED TO COUNCIL: That the Annual Report from the Chairman of the Finance, Audit and Risk Committee be presented to Council for endorsement on 27 November 2014. |
Agreed | ||
| 22 |
RISK MANAGEMENT UPDATE Report Appendix A The Performance and Risk Manager (PRM) presented the report of the Head of Finance, Performance and Asset Management and advised that the purpose of the report was to update the Committee on the management of the Strategic and Corporate Risks owned by Cabinet and the Senior Management Team. The PRM confirmed that the Cabinet Top Risks and Senior Management Team Top Risks had been reviewed and were summarised in the Matrices at Tables 1 and 2 respectively. The PRM advised that this Committee had to consider and review the Top Risks and that any changes to the Cabinet Top Risks must be referred to Cabinet for approval. The PRM advised the Committee that two new risks had been included as key projects in the Priorities for the District in 2014-2015 which supported the Council's Priority ‘Living within our Means'. The PRM confirmed that the development of Careline would contribute to the commitment under Public Health requirements to support and protect vulnerable people, not only those cared for at home in North Herts but across Hertfordshire. The PRM reminded the Committee that the Waste and Street Cleansing contract was due for renewal on 1 April 2017 and was recommended as a Top Risk due to the value of the contract and the impact of this service on the residents of North Hertfordshire. In addition this Top Risk was in response to a complex and evolving statutory environment, changes to the waste disposal infrastructure and consideration of collaborative working. The PRM referred the Committee to Appendix A for a full risk description. With regard to Careline the PRM advised that there were a number of opportunities to develop Careline business which would support independent living for Hertfordshire residents. The need for this SMT Top Risk reflected the potential of quick mobilisation required by Herts County Council and the number of risks to ensure that NHDC made the most of this and other opportunities for the development of Careline. The PRM referred the Committee to Appendix A for a full risk description. The Chairman thanked the Performance and Risk Manager for the presentation and the details of the two new risks. A Member questioned the absence of three particular risks that he was concerned about: Hitchin Town Hall, Car parking in Hitchin and Churchgate. The PRM confirmed that Hitchin Town Hall was included in the Cabinet Top Risk of delivery of the Museum FSR, Car Parking was a financial and operational risk not a Top Risk. Regarding Churchgate this was under regular review by the Churchgate Project. The Head of Finance, Performance and Asset Management stated that all risks at NHDC were assessed on a regular basis and he considered that the Churchgate Risk may well be enhanced in its rating in the near future. With respect to the SMT Risk for Careline the PRM advised that she would clarify what the abbreviation TSA stood for (Appendix A). The PRM agreed to email Members with more clarification on this matter and that the Careline Manager was reviewing TSA membership. A Member questioned the software upgrade for Careline that was due to take place in June and the PRM advised that she was in discussions with the Head of Housing and Public Protection Service and she would advise Members of the progress on this issue. The Member also questioned the validity of Veolia software which was stated ‘not to be in a useable format' (Appendix A). The PRM confirmed that this would be tested and checked soon. In response to another question the PRM confirmed that Delta software was a good procurement software programme and The Head of Finance, Performance and Asset Management and the Audit Manager at SIAS both confirmed that this software was good and provided a clear audit trail for the procurement process. The PRM also advised Members that the long lead time to 1 April 2017 for the renewal of the Waste Contract was to ensure that there would be no break in service provision to the residents of North Hertfordshire. A Member expressed some concern that despite the recognition and allocation of risks as detailed at Tables 1 and 2 it was not clear whether the mitigation of all of these risks had been assessed and that greater clarity was required. The PRM advised that the full risk including mitigation could be found on the Covalent system and assured the Member that due consideration in terms of the mitigation for every risk was listed and reviewed regularly by the Portfolio Holder, Service Managers. The Head of Finance, Performance and Asset Management stated that the mitigation of risks was very important and Members would be aware that some risks had to be accepted although there were no mitigation aspects available. The PRM assured the Committee that the Risk Management Group reviewed all risks and on a regular timetable as did the SMT. The Audit Manager at SIAS advised the Committee that Internal Audit had recently reviewed Risk Management at NHDC (July 2014) and the outcome was a Full Level of Assurance. The Chairman thanked Members and Officers for their contribution on the Risks at NHDC and that the clarification provided on the two new risks was welcomed. The Committee agreed that the Waste and Street Cleansing Risk should be passed to Cabinet for endorsement and that the SMT Risk for Careline was agreed. RESOLVED: (1)That the proposal to add a new risk ‘Waste and Street Cleansing Contract Renewal as a Cabinet Top Risk be agreed; (2)That the proposal to add a new Senior Management Team Top Risk ‘Development of Careline' be agreed. RECOMMENDED TO CABINET: That Cabinet be requested to endorse the proposed addition of a new Cabinet Top Risk ‘Waste and Street Cleansing Contract Renewal'. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee would receive updates on the assessment of changes to Cabinet and Senior Management Team Top Risks. |
Agreed | ||
| 23 |
ANNUAL REPORT TO THOSE CHARGED WITH GOVERNANCE Report Mr Phil Westerman of Grant Thornton thanked the Chairman for the opportunity to address the Committee. Mr Westerman advised the Committee that the audit for 2013-2014 was virtually complete and provided an update on the eight outstanding items listed in the report and thanked officers for the timely presentation of draft financial statements and the necessary working papers. Mr Westerman confirmed that Grant Thornton anticipated an unqualified opinion on the financial statements. The Auditor was satisfied that the Council provided an adequate amount for Business Rate appeals and that the Value for Money audit was unqualified and accordingly a Letter of Representation had been sought from the Council. Mr Westerman was pleased to advise the Committee that the six risk areas reviewed were at green status and commented that there was good senior management and Member engagement in financial planning and financial management as part of the Corporate Business Planning Process. The Committee noted that the external auditor had agreed that the NHDC asset at Lloyd Way, Kimpton (valued at £2M) had been correctly transferred from Surplus Assets to Assets for Sale and that consequently it was expected that this asset would be sold within the next 12 months, although officers indicated that any sale could take longer than 12 months. Mr Westerman confirmed that this valuation and sale of the Lloyd Way site had no material effect on the accounts. Also, the external auditor stated that the report included as a matter of note due to the size of the transaction the purchase of the District Council Offices for the sum of £3.6M. In response to a question the actual rent saving of £219,000K per annum was stated for information and that it was not possible or correct for the external auditor to make any qualification on this sum as per a Value for Money statement. Mr Westerman also stated that a review of rental values was not part of the external audit remit. The HF confirmed that the previous lease was a full repairing lease and that NHDC would continue to do its own maintenance and there was an evolving accommodation plan to make even better use of floor space at the DCO as well as Council on 18 July 2013 (Minute 36 refers) confirming that the purchase of the DCO was good value for money. The HF assured the Committee that the removal of the £219K rent made a strong impact on the Revenue Account. Mr Westerman proceeded to take the Committee through the report and provided more details on: Audit Findings, Value for Money, Accounting Policies, Estimates and Judgements, Internal Controls, Fees and Communication of audit matters to those charged with Governance. In response to a question Mr Westerman stated that discussions had taken place with the Management Team on Internal controls but there were no significant issues for concern. Mr Westerman concluded by confirming that there would be an additional fee for work on material business rates but it was quite likely that external audit charges would decrease overall. The Chairman was pleased to note that as for previous years an un- qualified opinion on the Accounts for 2013-2014 was forecast, that he would sign the Letter of Representation and invited questions from Members. A Member enquired if the external audit examined the validity or otherwise of housing benefit appeals and the Audit Manager at SIAS and Mr Westerman stated that there was no specific request to look at such an issue within the Annual Accounts and in support the Audit Manager at SIAS confirmed that this issue could be proposed as an additional audit on Housing Benefit within the 2014-2015 Internal Audit Plan if requested. The Head of Finance, Performance and Asset Management (HF) and the Accountancy Manager (AM) gave a short but detailed response to a Member concerning the implementation of the Business Rates Retention scheme and confirmed that the non collection of business rates could have an effect on income to NHDC. The Member noted that a provision (currently five per cent) must be made in the annual accounts for successful appeals and that any appeal granted would be backdated to the date of lodging the appeal. The Chairman enquired if there was any record of appeals on business rates and the Accountancy Manager stated that he would have to review past data for such information and what the loss of income was due to successful appeals. The AM advised that a review at 30 June 2014 indicated a large number of newly lodged business rates appeals but a greater number of appeals either withdrawn or dismissed by the Valuation Office Agency. The HF stated that under the Localisation of Business Rates legislation NHDC were able to retain six pence in every £1 collected. A Member questioned the business efficiency of purchasing the freehold title of the District Council Offices for £3.6M and had there been changes in the office rental policy and environment. The HF advised that the Council were relatively Capital rich but Revenue poor and that the annual rental of £219K had been a drain on the Revenue Account. The only outgoing now was a ground rate payment to the Letchworth Garden City Heritage Foundation and that the offices were not an investment property and the main objective was to maintain the security of the Revenue Account. There ensued a lengthy discussion on IT controls and that staff should be and were aware of IT policies and the Committee noted that the Internal Control IT recommendations had been passed to IT Management and that the immediate resolution was to place on each employee's PC screen at log in a statement on confidentiality and IT Policy which must be acknowledged and accepted by each employee before proceeding. Members were also advised that the responses to the recommendations would be brought back to this Committee and the SIAS Audit Manager confirmed that the IT audit would look at staff responses to IT updates, leaver forms and removal of leaver email addresses. RESOLVED: (1)That the information provided in the Audit Findings report be noted; (2)That the un- qualified opinion on the Accounts for 2013-2014 by Grant Thornton be noted and welcomed. REASON FOR DECISION: To confirm that the findings of the external auditor were reviewed and noted and that the recommendations were acted upon. |
Noted | ||
| 24 |
THE EFFECTIVENESS OF THE FINANCE, AUDIT AND RISK COMMITTEE Report The Audit Manager (AM) at SIAS presented the report to the Committee and referred to the Terms of Reference for FAR at Table 1 for the details of the key duties of this Committee and to Appendix A which was the Action Plan for 2014-2015. The AM was pleased to advise the Committee that SIAS had ascertained that all duties listed in Table 1 were discharged in 2013-2014. The AM stated that during the year a more effective method of enhanced reporting of progress against completion of the audit plan with indicators of the level of confidence the Service had in completing projects had been brought into use. Also, Members were invited at the request of the Chairman to attend the opening and closing meetings of an audit to provide sight of the scoping document followed by the discussion of findings at the conclusion of the audit. With this objective in mind the AM agreed to email all Members with the audit timetable for this year The AM referred Members to Appendix A which included a proposed action plan that would develop, support and continue the positive actions taken to ensure the continued effectiveness of this Committee. Also, that the change of Committee membership meant that it was important for new Members to complete the skills and knowledge questionnaire as soon as possible in order to allow a more focussed offering of training in the future. The Chairman thanked the Audit Manager for the positive message within the report and urged Members to attend the opening and closing meetings of any audit that they may have a particular interest in with a view to improve their knowledge of the internal audit process. RESOLVED: (1) That confirmation that the Finance, Audit and Risk Committee was operating effectively be noted and welcomed; (2) That the Finance, Audit and Risk Committee Action Plan for 2013 -2014 as presented at Appendix A be agreed. REASON FOR DECISION: For this Committee to ensure good governance within North Hertfordshire District Council. |
Noted | ||
| 25 |
ANNUAL GOVERNANCE STATEMENT 2013-2014 Report Appendix A The Performance and Risk Manager (PRM) presented the report of the Head of Finance, Performance and Asset Management (HF). The PRM reminded the Committee that once this Annual Governance Statement was noted by the Committee it would be included in the Statement of Accounts for 2013-2014 and was attached at Appendix A for information. The PRM referred the Committee to Table 1 and confirmed that Improvement Actions: IT Disaster Recovery, Document Retention, Member Training and BACS were reported at meeting held on 23 June 2014 (Minute 8 refers) and that Payroll (Items 5.1,5.2 and 5.3) actions had been amended following the issue of the final internal audit report on SERCO Payroll BACS Controls. Of particular interest to Members were the actions to be taken for an IT breakdown or physical disaster such as fire or flood as there was a lot of data stored in the system. The Audit Manager at SIAS stated that business continuity, protective measures and virus prevention were important items to be checked for efficiency. In response to a question on Document Retention the PRM confirmed that all documentation would be deleted according to the high level recommendation once the upgrade to Information at Work was completed. The Chairman thanked the Performance and Risk Manager for the update on the Final Annual Governance Statement for 2013 - 14 and the details of the Action Plan. RESOLVED: (1) That the final Annual Governance Statement for 2013-2014 be approved and included with the Statement of Accounts for 2013-2014; (2) That the progress against the Action Plan (Improvement Actions) be noted. REASON FOR DECISION: For this Committee to have assurance that this Council was reviewing and where necessary improving its governance arrangements. |
Noted | ||
| 26 |
STATEMENT OF ACCOUNTS 2013-2014 (DRAFT - SUBJECT TO CONCLUSION OF THE EXTERNAL AUDIT) Report Appendix A - Statement of Accounts Appendix B - Letter Of Representation The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance and confirmed that the tabled Annual Statement of Accounts for 2013 - 2014 (Appendix A) was the final version, had been subject to external audit and had been ‘signed off' by the Strategic Director of Finance, Policy and Governance. Also the Chairman of the Finance, Audit and Risk Committee was required to sign the Letter of Representation that would accompany the Annual Statement of Accounts. The AM thanked all Members who were able to attend the briefing on the Annual Accounts held on 11 September 2014. With reference to the tabled Appendix A - Annual Statement of Accounts (Page 80) and the write off of uncollected debts and how debtors occurred a Member requested more information on why so much Council Tax and Business Rates were written off. The AM stated that the write off of debtors could be the result of a number of issues - such as a subsequently successful discount or because a debtor had left the District. In 2013 - 2014 debt written off totalled £500K whilst in 2012-2013 the amount written off was £782K. The Head of Finance, Performance and Asset Management (HF) advised the Committee that the collection rates for NNDR and Council Tax were on average 97 to 98 per cent with the actual collectible amount for NNDR and Council Tax £38M and £69M respectively. . It was noted that NHDC collects Council Tax on behalf of the County Council, the Police and Crime Commissioner and the Parish and Town Councils and so only keeps a fraction of the amount collected. Similarly NHDC collects NNDR on behalf of Central Government and the County Council. The HF assured the Committee that NHDC did pursue bad debtors using bailiffs but debt recovery overall was difficult. A Member enquired if any benchmarking was made against other neighbouring or similar local authorities on collection rates and the Performance and Risk Manager advised that it was very difficult to obtain ‘like for like' data. NHDC was ranked fourth in Hertfordshire for the collection of Council Tax. A Member thought that there should be a cut off point when the cost of collecting bad debts was greater than the income and another Member enquired if officers looked at any trends and whether collection rates varied year on year. The Chairman thanked Members and Officers for their contributions to the discussions on the Annual Accounts and the Committee agreed that he should sign the Letter of Representation. RESOLVED: (1) That the tabled Statement of Annual Accounts for 2013-2014 be agreed; (2) That the Chairman of the Finance, Audit and Risk Committee be requested to sign the Letter of Representation. REASON FOR DECISION: For the Committee to review and comment if appropriate on the Annual Statement of Accounts for 2013 - 2014 and ensure that the Council meets the requirements of Audit and Account Regulations 2011 that requires the approval and publication of the Statement of Accounts no later than 30 September 2014. |
Noted | ||
| 27 |
SIAS ANNUAL REPORT FOR 2013 - 2014 Introduction Report The Audit Manager at SIAS (AM) presented the report of the Head of Assurance for Shared Internal Audit Services which was an annual report that detailed the continuing success of SIAS partnership - which now had eight partner Councils including NHDC - in the last 12 months. The AM was pleased to report that the partnership had turned in a solid business performance, investment in the Audit Team had increased in the year and five of the audit team attended in depth management training provided by Hertfordshire County Council and commercial skills had been developed with the assistance of Price Waterhouse Coopers The AM referred the Committee to Appendix A and advised that the SIAS business for the previous 12 months had been strong with 97 per cent of the Audit Plan completed against a target of 95 per cent, 383 pieces of assurance work were completed to at least a draft stage by 31 March 2014. Only one audit did not meet the minimum target with client satisfaction at 19 per cent at very good and 80 per cent given as excellent. The AM referred the Committee to Appendix B which set out the summary financial position for SIAS at 31 March 2014, although there had been a small deficit due to staff absence due to sickness. Members expressed satisfaction with the on- going success and progress with SIAS in this its third year of operation and enquired if SIAS intended to offer services to other local authorities in Hertfordshire as SIAS were involved with seven other Hertfordshire authorities. The AM advised that Broxbourne BC was in partnership with Harlow Council and that currently Dacorum DC and St Albans City Council had not joined SIAS. Another Member suggested that SIAS could consider adjacent authorities such as Central Beds and South Cambs. The AM stated that whilst expansion for SIAS was possible the management always considered such moves to ensure that the expansion would not affect the quality of work whilst acknowledging that additional members could reduce the audit costs to each authority. RESOLVED: (1) That the contents of the SIAS annual report for 2013 - 2014 be noted; (2) That all members of the SIAS team be congratulated on the success of SIAS in this its third year of operation. REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the SIAS annual report for 2013-2014. |
Noted | ||
| 28 |
SIAS UPDATE ON PROGRESS AGAINST THE 2014-2015 AUDIT PLAN Introduction Report The Principal Auditor (PA) presented the report of the Head of Assurance for SIAS which detailed progress on the Internal Audit Plan at 22 August 2014. The PA was pleased to advise the Committee that there were no ‘limited' or ‘no' assurances issued in the period 7 June 2014 to 22 August 2014. At 22 August 2014 25 per cent of the 2014-2015 Audit plan days had been delivered and referred the Committee to Appendix A for a status update on each individual audit. The PA described to the Committee the completion of four outstanding audits from 2013-2014 and the completion of five audits since the last meeting of FAR in June 2014. The PA referred the Committee to Appendix B which detailed the implementation process of previously agreed high priority audit recommendations and to Appendix C which gave details of the formal start dates of audits which was designed to provide a smoother level of audit plan delivery throughout the year. The PA advised that six audits were at Draft or Final stage, three audits had commenced field work and a start date with scope had been agreed for 18 audits. One audit remained to have a formal start date and against targets set for the year the audit plan had 25 per cent completion against the profiled target for 22 August of 28 per cent. In response to questions about the level of audit completion of 25 per cent at 22 August 2014t the Audit Manager confirmed that he was very pleased with progress and that the financial audits were always at the back end of the audit year which meant that progress after four months was very much as expected and that Appendix C showed the Audit Plan for the full year, in addition the four reports from last year completed at the beginning of this year had affected the audit plan slightly. The AM stated that to have 21 per cent completion against the 18 per cent profiled target for planned projects was commendable. A Member requested that the columns in Appendix A should also include actual start dates for each audit as in month start date planned and actual start date. The Chairman enquired if Price Waterhouse Coopers attended a pre - audit briefing and the AM confirmed that PWC undertook the same procedures as SIAS and agreed that there were some advantages in using an audit partner which allowed SIAS to be more flexible as to its own work and vary those audits undertaken by Price Waterhouse Coopers. The Chairman thanked the Principal Auditor for the updating on the Audit Plan and looked forward to the next report and that the target profile was being maintained. RESOLVED: (1) That the position of the Internal Audit Plan at 22 August 2014 as presented at Appendix A be noted; (2) That there had been no changes to the Audit Plan for 2014-2015 at 22 August be noted; (3) That the Implementation Status of High Priority Recommendations as presented at Appendix B be noted; (4) That the monthly start times of audit plan items as listed at Appendix C be noted. REASON FOR DECISION: To allow the Finance, Audit and Risk Committee review, comment and challenge the current status of the internal audit plan. |
Noted | ||
| 29 |
FIRST QUARTER REVENUE MONITORING 2014-2015 Report Appendix A The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 23 September 2014. The AM referred the Committee to the Executive Summary which identified the salient points applicable to this report and to the seven tables which in turn detailed: Significant Changes to the General Fund (projected expenditure of £16.097); progress on Carry Forward Budgets (total of £351 carried forward into 2014-2015 - at the end of the first quarter £57K had been spent); Summary of all 2014 - 2015 Efficiency Proposals - with an underachievement of £44K from the outsourcing of the payroll service to SERCO and inflationary increase in off street car parking charges - (total of £1.514M of which £1.470M had been saved to date); Key Corporate ‘Health' Indicators; Building Control fee earning applications slightly up; Development Control fee earning applications slightly up; Land Charges Searches were greater than the comparable period for the last two years; Car parking tickets purchased were greater for Hitchin, Letchworth and Royston than in the last two years with penalty charge notices falling by just over 200 from last year. The AM advised the Committee that revision of the working budget of the General Fund net projected expenditure (Table 5) gave a decrease of £17K in expenditure for the year. The Committee noted that expenditure of £25K had been spent on three known financial risks (Careline income, cost uncured in moving on travellers and achievement of payroll outsource saving) and that Table 7 listed the earmarked reserves for 2014-2015 - a total of £4.492M at 31 March 2015 following adjustments to Leisure Management Reserve and Town Centre Maintenance. The AM concluded his presentation with clarification of the funding of net expenditure came from the Council Tax precept, revenue support grant, new homes bonus and retained business rates. The AM reminded the Committee that funding from council tax and business rates was dependant on collection rates and were accounted for separately in the Collection Fund. The Government would provide compensation for business rate relief via a Section 31 grant but this would be paid into the General fund rather than the Collection Fund, any grant would then be transferred to an earmarked reserve and used to partly offset the Collection Fund deficit in 2015-2016. The Chairman thanked the Accountancy Manager for the updating on the Revenue Budget at the first quarter together with the clarifications. A Member requested clarification of the additional expenditure incurred in the transfer of the payroll service to SERCO as identified in Table 1 and the Head of Finance, Performance and Asset Management accepted that there had been several problems during the transfer which meant that the report was not available at this meeting and that a full report on the transfer was scheduled for the meeting to be held on 11 December 2014. With reference to Table 4 - Key Corporate ‘Health' Indicators a Member suggested that this table could be improved by the inclusion of values applicable to the indicators one year previously especially if the indicator status (green, amber or red) was different. The Member proposed that this could be achieved by the addition of an extra column for each indicator against the four columns in the table. The AM considered that this was a feasible suggestion but as this was a report to Cabinet any change to the layout of any table in the report would have to be endorsed by Cabinet. Accordingly the Chairman proposed that this suggestion should be forwarded to Cabinet which was agreed subject to one abstention regarding proposed increases to car park charges. RESOLVED: (1) That the proposed changes to the 2014-2015 General Fund Budget giving a £17K decrease in net expenditure be noted; (2) That the proposed changes to the 2015-2016 General Fund Budget giving a £74 decrease in net expenditure be noted; (3) That the Committee agreed to request Cabinet to consider the proposal to add additional columns in Table 4 - Key Corporate ‘Health' Indicators that would include data for the previous year for each of five Indicators. RECOMMENDED TO CABINET: That Cabinet be requested to take due consideration of the request by this Committee regarding Table 4 - Key Corporate ‘Health Indicators for the inclusion of data applicable to the previous year for each indicator. REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Draft First Quarter Revenue Monitoring report in 2014-2015. |
Agreed | ||
| 30 |
FIRST QUARTER CAPITAL MONITORING 2014-2015 Report Appendix A Appendix B The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 23 September 2014. The AM referred the Committee to Table 1 which listed the schemes funded from Capital receipts that were projected to start or continue in 2015-2016 and to Table 2 which listed changes to Capital schemes commencing in 2014-2015. Of particular note was the transfer of the annual Microsoft software cost of £70K to the General Fund as the cost was an on going requirement and should be charged to Revenue and the AM advised that a base budget adjustment had been made to incorporate this cost into the General Fund. The AM referred the Committee to Appendix A which detailed the capital programme by priorities and by service and gave details of the projected availability of capital receipts. With regard to Table 2 and the projected expenditure on repairs at Burymead the Head of Finance, Performance and Asset Management (HF) stated that the roof of this storage facility was close to the end of its design life with rainwater entering the building. The HF confirmed that this building was required for the storage of the North Hertfordshire Museum archive and had to be made watertight prior to the re-location of materials to the new North Hertfordshire Museum at Hitchin Town Hall in 2015. Also, the new museum could not store all of the archive that was currently being catalogued and cleaned. In response to a question on the installation of electronic gates at St. John's Cemetery the AM confirmed that the remaining budget of £34K was to supply two sets of gates at this cemetery. A Member challenged the sum of £20K from S106 monies as being very small and the AM clarified that there was over £200K anticipated from S106 allocations and that the £20K was allocated for small projects. The Chairman thanked the Accountancy Manager for the update on Capital expenditure and clarification on changes to capital schemes in 2014-2015. RESOLVED: (1) That the proposed decrease in expenditure for capital programme in 2014-2015 arising from the re-profiling of schemes of £336K be noted; (2) That the proposed changes to the projected capital programme for 2014-2015 arising as a result of changes to the capital schemes giving a decrease in expenditure of £337K be noted. REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Capital Programme. |
Noted | ||
| 31 |
TREASURY MANAGEMENT FIRST QUARTER REPORT 2014-2015 Report Appendix A The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 23 September 2014. The AM reminded Members of the three risks that NHDC had to be aware of when making investments - credit, liquidity and market and that there had been no variances to the strategy. There had been one exception where the £9M investment limit with Lloyds Bank had been exceeded for a few days (£11.3M). The majority of funds were in the Lloyds current account which paid interest and could be accessed at any time. The AM advised that in the first quarter of 2014-2015 £128K of interest had been received. New investment gave an average of 1.25 per cent interest with 1.57 per cent interest on all outstanding investments at 30 June 2014. The AM referred the Committee to Appendix A which was the Capita report to NHDC on Treasury Solutions for the quarter ended 30 June 2014 and that Section 4 detailed new borrowing and the interest rates available from the Public Works Loans Board. The AM confirmed that due to a cash flow shortfall in April the Council had borrowed £570K for one day at a cost of £9.53. In response to a question the AM confirmed that there were regular checks on the possibility of making early loan repayments provide the terms were acceptable. The AM was pleased to advise that the Council had more cash investments than borrowing. The Chairman thanked the Accountancy Manager for the clarification of the Treasury Management Strategy and current investments and outstanding loans. RESOLVED: That the position of the Treasury Management activity at 30 June 2014 be noted. REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Treasury Management Strategy and the position at second quarter end. |
Noted | ||
| 32 |
FUTURE MEETINGS - POSSIBLE AGENDA ITEMS Although there were no suggestions for agenda items at future meetings the Chairman advised that any member of the Committee was welcome to put forward items for consideration directly to himself or via the Committee Clerk. |
Noted | ||