| 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 Simon Harwood, Councillor S.K. Jarvis, Councillor Lorna Kercher (substitute) and Councillor Jim McNally. |
| IN ATTENDANCE: | Norma Atlay - Strategic Director of Finance, Policy and Governance 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 Alan Cooper - Principal Auditor (Shared Internal Audit Service) Iain Murray - Engagement Lead - Grant Thornton Richard Lawson - Engagement Manager - Grant Thornton |
| ALSO PRESENT: | Councillor Julian Cunningham - NHDC Portfolio Holder for Policy, Transport and Green Issues Ian Gourlay - Committee and Members Services Manager At commencement one member of the public. |
| Meeting attachment |
Agenda Front Pages |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 59 |
APOLOGIES FOR ABSENCE An apology for absence had been received from Councillor Deepak Sangha. In accordance with NHDC Procedures Councillor Lorna Kercher advised the Chairman that she would be a substitute for Councillor Sangha. An apology for absence was also received from Phil Westerman of Grant Thornton. |
Noted | ||
| 60 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 26 January 2015 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 61 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 62 |
CHAIRMAN'S ANNOUNCEMENTS Councillor Michael Weeks in line with the Code of Conduct advised that any Declarations of Interest should be declared immediately prior to the item in question. The Chairman welcomed Iain Murray and Richard Lawson from Grant Thornton and thanked Grant Thornton for the advice and contributions to this Committee during their tenure as the external auditor. The Chairman also advised that at the next meeting of this Committee scheduled for 15 June 2015 the agenda would include a report update on Building Control - Hertfordshire Authorities Project. The Chairman proposed and it was agreed to record a vote of thanks to Tim Neill the NHDC Accountancy Manager for his support to this Committee over the last seven years. Mr Neill will be leaving NHDC on 17 April to join Welwyn and Hatfield Borough Council and all present wished him every success in his new role. The Chairman advised that he wished to place on record the thanks of himself and this Committee to Nigel Schofield who would be retiring soon for his support to this Committee and to its predecessors ERIC and PARC in the previous 15 years. The Chairman wished all Councillors who were seeking re-election good luck at the forthcoming elections on 7 May. |
Agreed | ||
| 63 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 64 |
NORTH HERTFORDSHIRE DISTRICT COUNCIL - AUDIT COMMITTEE UPDATE Introduction Report The Grant Thornton Engagement Manager (EM) thanked the Chairman for the opportunity to address the Committee and advised that this report gave progress against the external audit plan at February 2015. The Engagement Manager advised that due to the challenges met by local authorities as austerity and funding reductions pressure to reduce expenditure was much greater and this had been confirmed by the Grant Thornton annual review of Local Government Governance which showed that the maintenance of effective governance was becoming much more complex and increasingly very important. Consequently the external auditor had concentrated on three key areas in the Audit Plan.: Governance of NHDC; Governance in working with others and Governance of stakeholder relations. The Engagement Manager stated that interim audit work would take place between 16 February and 13 March 2015 and then reported to this Committee at the meeting scheduled for 15 June 2015. The EM confirmed that the final accounts audit work was scheduled for June and July 2015 and then reported to this Committee at the meeting scheduled for 24 September 2015. Also, that the findings of the Value for Money audit would be presented to this Committee at the meeting scheduled for 24 September 2015. The Engagement Manager proceeded to give the Committee an update on: Development of the Local Government Pension Scheme; The Independent Commission into Local Government Finance; Help into Work Programmes; The Department of Communities and Local Government Build to Rent Scheme (Manchester and Salford); Provision for Business Rates Appeals; the Early payment of Pension Contributions and The Inclusion of Overtime in the calculation of Holiday Pay. The Chairman thanked the Engagement Manager for clarification of progress against the 2014-2015 External Audit in 2015 - 2016 and invited comments and or questions from the Committee. There were no questions. RESOLVED: That the details of progress against the 2014-2015 Audit Plan be noted. REASON FOR DECISION: For the Committee to note the progress to date of the 2014-2015 Audit Plan. |
Noted | ||
| 65 |
NORTH HERTFORDSHIRE DISTRICT COUNCIL - AUDIT PLAN FOR 2015-2016 Introduction Report The Engagement Manager (EM) thanked the Chairman for the invitation to address the Committee and advised the Committee that planning for the annual external audit in 2015-2016 it was necessary for Grant Thornton to understand the challenges and opportunities faced by this local authority, notably: Partnership working; The Local Plan; Investment and Economic Growth; Local Government Finance Settlement and New Payroll Provider. The EM advised that the planning of the audit would include the impact of key developments in the local government sector whilst taking account of national audit requirements as set out in the Code of Audit Practice and associated guidance. The Committee noted that the external auditor undertaking the audit for 2015-2016 may not be Grant Thornton as the contract was expected to be awarded to Ernst and Young. This audit programme would ensure compliance with the CIPFA Code of Practice, the 2015 Accounts and Audit Regulations, performance against the 2014-2015 budget, undertake a review of financial resistance as part of the Value for Money conclusion; and assess the Whole of Government accounts together with a grant claims certificate. The Engagement Manager clarified the audit approach for next year with notice of significant risks such as: Fraudulent transactions, Management of over-ride of controls, and Completeness of payroll. Other risks to be examined were: Securing financial resilience and securing proper arrangements for securing economy, efficiency and effectiveness. The Committee noted that the programme of interim audit would include: A review of the internal work programme, walk through testing, a review of information technology controls, journal entry controls and Value for Money. The Engagement Manager concluded his presentation by referring to Section 8 of the report which gave key dates in 2015 -2016 and the appropriate meetings of the Finance, Audit and Risk Committee for presentation of audit progress reports. The Chairman thanked the Engagement Manager for clarification of the External Audit in 2015 - 2016 and invited comments and or questions from the Committee. A Member enquired if there should be a change in National Government whether this could be considered as a risk for this Council. The Engagement Lead stated that there would have to be a fundamental shift in Public Sector Policy that would affect local authorities but there could be a change in procedure for example the payment of ‘New Homes Bonus' and that this would lead to a further review of the Value for Money assessment and that NHDC were aware of this matter. A Member expressed concern about allocated risks and operational risks and opined that funds were not available for aspirational risks which could not be supported due to a lack of staff resources. The Engagement Lead reminded the Committee that Grant Thornton provided an opinion on the statement of accounts and would examine financial planning and work force planning as part of the value for money assessment. RESOLVED: That the details of the 2015-2016 Audit Plan be noted. REASON FOR DECISION: For the Committee to note the 2015-2016 Audit Plan. |
Noted | ||
| 66 |
RISK MANAGEMENT UPDATE Report Appendix A - Revised and Top Risks The Performance and Risk Manager (PRM) presented the report of the Head of Finance, Performance and Asset Management and confirmed that as standard procedure all Cabinet Top Risks and Senior Management Top Risks had been reviewed by the Risk Management Group and Lead Officers had discussed such risks with the appropriate Portfolio Holders. The PRM referred the Committee to Tables 1 and 2 which showed the matrices for Cabinet Top Risks and Senior Management Team Top Risks respectively. The PRM advised the Committee that the Cabinet Top Risk ‘Waste and Street Cleansing Contract Renewal' had been revised following review to ensure that all sub risks were now included in the main risk. Therefore it was proposed to add the following two sub risks viz. ‘Co-mingled Waste' and ‘Northern Transfer Station and Ancillary Facilities' within the Top Risk. The PRM referred the Committee to Appendix A which detailed these key sub risks (11 December 2014, Minute 40(4) refers). The PRM confirmed that the two sub risks were listed in the Cabinet Top Risks Matrix and listed these sub risks (with risk assessment score) for clarification: a.Co-mingled Waste (7); b.Northern Transfer Station and Ancillary Facilities (6); c.Trade Waste (3); d.Waste and Recycling Service for flats (5); e.Street Cleansing (5); f.Shared Procurement Opportunity (6). The PRM confirmed that mitigating actions on these sub risks or planned mitigations were described in Appendix A and that the planned risk mitigation for the overarching Top Risk was as follows: a.To outsource advice on procurement if necessary; b.To undertake a ‘soft' market exercise and benchmark against other authority's contract specifications; c.Undertake a consultation exercise to include parishes; d.To obtain a prompt decision on whether this should be a joint procurement with East Herts District Council. With regard to Senior Management Team (SMT) Risks the PRM advised that there were two SMT risks that could be removed and be treated as operational management risks: Replacement Payroll System/Service and Procurement, Tendering and Letting of Contracts. The PRM confirmed that there had been no obvious impact on the Welfare Reform and Interest Rates risk following the introduction of welfare reforms in North Hertfordshire and no increase in interest rates and it was proposed that this risk should be deleted. The PRM proposed that there should instead be a new Senior Management Team Top Risk of ‘Increased Homelessness and Use of Bed and Breakfast Accommodation'. The PRM wished to make one correction to Table 2 where this new risk should be placed in Impact 3 ‘high' with Likelihood 2 ‘medium' (incorrectly placed in Impact 2 ‘medium) as this new risk had a value greater than £100K. The PRM referred the Committee to Appendix A for a full description of this new risk. The Chairman thanked the Performance and Risk Manager for the detailed clarification behind the proposed new Cabinet Top Risk and the new Senior Management Top Risks and invited comments and or questions from the Committee. There ensued a short discussion on the reasons behind the changes to the Increased Homeless and Use of Bed and Breakfast Risk and the magnitude of change. The PRM advised that in the first quarter of 2014-2015 there had been 16 homeless families in North Herts and that figure had now risen to 80 families who were placed in Bed and Breakfast Accommodation with a rise in costs to the Authority. It was noted that his could become a significant charge to the Council as only about 35 per cent of housing benefit costs can be claimed through government subsidy leaving a budget gap. The Head of Finance, Performance and Asset Management stated that this increase was due in part to the improving economy where private landlords were declining to accept tenants on benefits as there was increasing demand from other potential tenants in the market as well as a lack of suitable temporary accommodation. The Engagement Manager from Grant Thornton was able to confirm that he was aware of two other local authorities in Hertfordshire where homelessness was increasing. In response to a question the PRM confirmed that there was a statutory definition of homelessness which all local authorities had to follow. In response to another question the PRM confirmed that officers were aware of a possible displacement impact of homeless people into North Hertfordshire following the trial roll out of Universal Credit in Bedfordshire. RESOLVED: (1)That the proposal to amend the Cabinet Top Risk ‘Waste and Street Cleansing Contract Renewal' to include the following six sub risks: a.Co-mingled Waste; b.Northern Transfer Station and Ancillary Facilities; c.Trade Waste; d.Waste and Recycling Service for flats; e.Street Cleansing; and f.Shared Procurement Opportunity, be agreed and referred to Cabinet; (2)That, as the current Top Risks of "Co-mingled Waste" and the "Northern Transfer Station and Ancillary Facilities" are to be included under the main Waste and Recycling Contract Renewal risk (as set out in (1) above), rather than as separate risks, this change be agreed and referred to Cabinet; (3)That the proposal to convert the Senior Management Team Top Risk ‘Replacement Payroll System/Service to an operational contract management risk be agreed; (4)That the proposal to convert the Senior Management Team top Risk ‘ Procurement, Tendering and Letting of Contracts to an operational management risk be agreed; (5)That the proposal to delete the Senior Management Team Top Risk ‘ Welfare Reforms and Interest Rates' be agreed; and (6)That the proposal to add a new Senior Management Team Top Risk ‘Increased Homelessness and use of Bed and Breakfast Accommodation' be agreed. RECOMMENDED TO CABINET: (1)That the Cabinet Top Risk ‘Waste and Street Cleansing Contract Renewal' be amended to include the following six sub risks: a.Co-mingled Waste; b.Northern Transfer Station and Ancillary Facilities; c.Trade Waste; d.Waste and Recycling Service for flats; e.Street Cleansing; and f.Shared Procurement Opportunity; and (2)That it be agreed that the current Top Risks of "Co-mingled Waste" and the "Northern Transfer Station and Ancillary Facilities" be included under the main Waste and Recycling Contract Renewal risk (as set out in (1) above), rather than as separate risks. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee were aware of all the relevant factors taken into consideration for the amendment of Cabinet Top Risks and Senior Management Team Top Risks. |
Agreed | ||
| 67 |
SIAS - UPDATE ON PROGRESS AGAINST THE 2014-2015 AUDIT PLAN Introduction Report The Principal Auditor (PA) at SIAS gave apologies on behalf of the SIAS Audit Manager who was at East Herts District Council this evening. The PA presented the report of the SIAS Audit Manager and referred the Committee to Appendix A which gave details of progress against the 2014 - 2015 audit plan, to Appendix B - Implementation Status of High Priority Recommendations and to Appendix C which gave details of start dates for audit plan items in the period April 2014 to March 2105. The Principal Auditor also advised the Committee of progress against the Audit Plan as at 20 February 2015, the findings for audits assessed as limited or no assurance in the period 22 November 2014 to 20 February 2015, proposed amendments to the current 2014 - 2015 Audit Plan, the Implementation status of previously agreed high priority audit recommendations with a proposal to remove one completed action: ‘Document Retention' and an update on performance management information at 20 February 2015. The Committee noted that 80 per cent of audit days had been delivered at 20 February 2015 (Appendix A) and that four days on an audit of the collection of car parking income and one day on an audit of the accounts of the King George V Playing Fields Charitable Trust had been covered by the audit contingency allowance. The PA next described the completed audits (20 in number), Fieldwork and or Quality Review of audits (9 in number) and that preliminary work had commenced on the final audit - Asset Management (Appendix C). The PA advised that one audit had been deferred viz. Localism Planning Reforms. The Principal Auditor advised that seven audits had been completed to draft report stage since the last meeting of the Committee of which two were not assessed and three had substantial levels of assurance and two were at a moderate level of assurance. With regard to the agreed Implementation Status of High Priority Recommendations the PA proposed that the Audit recommendation from the Document Retention audit should be regarded as complete as the recommendation had been assessed as complete by the IT Manager. The Committee noted that the two other High Priority audit recommendations from other audits still required action although the original target implementation date had passed. Further updates on the status of these would be requested from the service area and presented at the next meeting of this Committee scheduled for 15 June 2015. The Chairman thanked the Principal Auditor for the update on progress against the Audit Plan for the current year and invited questions and or comments from the Committee. The Chairman enquired as to the reason for the additional audit of the King George V Trust and the Head of Finance, Performance and Asset Management (HF) confirmed that although The Charities Commission did not require an audit the Cabinet Sub Committee (Council Charities) had requested such an audit as they were entitled to do. (Minute 6 of the meeting held on 22 September 2014 refers). Another Member referred to the schedule of high level recommendations with regard to the setting of completion dates and the length of time taken to complete the actions listed in each audit report. Were timescales unrealistic? The Strategic Director of Finance, Policy and Governance reminded the Committee that action ‘owners' could be questioned by this Committee on the status of progress and in fact the Head of Revenue, Benefits and IT attended the meeting of this Committee held on 13 June 2013 (Minute 9 refers) to explain the reasons for the delay in meeting delivery of agreed actions that were outstanding at that time. The Member also questioned whether the three Audit Recommendations at Appendix B were a systemic indication of management not completing agreed actions as proposed and what were the reasons for the delay. The HF advised that there was a new IT system with upgrades and this had taken time for the audit recommendation to be completed. A Member opined that it was not wise to have a fixed completion date as slippage could occur. The Chairman enquired as to the timing of an audit of Freedom of Information adherence and the PA advised that the audit had been concluded recently and outcomes would be included in the SIAS Update Report presented at the meeting scheduled for 15 June 2015. RESOLVED: (1) That the Internal Audit Progress Report for the period to 20 February 2015 as presented at Appendix A be noted; (2) That the proposal to remove the High Priority Recommendation ‘Document Retention' as presented at Appendix B be agreed; (3) That the proposal to consider the following High Priority Recommendations: IT Disaster Recovery and Non Domestic Rate Avoidance outcomes be presented at the meeting of this Committee scheduled for 15 June 2015 be agreed; (4) That the proposed amendments to the Audit Plan as presented at Paragraph 2.5 be agreed. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee were aware of progress against the Audit Plan for 2014 -2015 and agreed to changes in the Audit Plan and agree the removal of one high Priority Recommendation. |
Agreed | ||
| 68 |
SIAS INTERNAL AUDIT PLAN FOR 2015-2016 Introduction Report The Principal Auditor (PA) at SIAS presented the report of the SIAS Audit Manager which sought to present the proposed Internal Audit Plan for 2015 - 2016 which set out the audit schedule and formed part of the Council's wider assurance framework. The Principal Auditor referred the Committee to Appendices A, B and C which presented the Plan for 2015 - 2016, the reserve audit list for 2015 - 2016 and the start dates for each audit respectively. The PA described to the Committee the approach to formulating the annual audit which included: Consideration of risks from the Council's Risk Register and of the Council's objectives and priorities; Meetings with Management; Consideration of common themes arising from horizon scanning and development of the audit plans for other SIAS clients. Preliminary discussions had also taken place over proposed start dates (by month) in order to schedule the work throughout the year. The Principal Auditor concluded his presentation through confirmation of the 400 days allocated to the 2015 - 2016 Internal Audit being used of which 10 days was allocated to outstanding audits from 2014-2015. The Chairman thanked the Principal Auditor for the details of the Internal Audit Plan for 2015 - 2016 and invited comments and or questions from the Committee. A Member enquired as the calculation of the number of days required to undertake an audit and the PA advised that individual assignments were agreed with the Senior Management Team. In response to another question concerning the proposed scope of the Section 106 payments audit. The PA stated that the detail would be agreed with management at the time the audit was undertaken. The Strategic Director of Finance, Policy and Governance advised that the Community Infrastructure Levy would soon replace S106 and agreed to remove ‘new' from the audit of S106 contributions in 2015-2016 Audit Plan so that the scope covered controls over existing S106 agreements. The Principal Auditor confirmed that the contingency budget of five days would be allocated in conjunction with management during the year and that all planned audit days would be used in the 2014 - 2015 Audit Plan. Any plan changes would be presented to this Committee for approval. A member questioned the allocation of 10 days to the Social Media audit and the PA confirmed that should the planned number of days might not be fully utilised and that any surplus would be added to the number of days in the contingency ‘pot'. RESOLVED: (1) That the proposed NHDC Internal Audit Plan for 2015 - 2016 as presented at Appendix A be agreed; (2) That the proposed reserve list for the NHDC Internal Audit Plan for 2015 - 2106 as presented at Appendix B be agreed; (3) That the proposed audit start dates for the NHDC Internal Audit for 2015 - 2106 as presented at Appendix C be agreed; REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee were aware of the proposed NHDC Internal Audit for 2015 - 2016. |
Agreed | ||
| 69 |
THE THIRD QUARTER REVENUE MONITORING FOR 2014-2015 Report Appendix A - General Fund Summary The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was a report to Cabinet for the meeting on 24 March 2015. The Accountancy Manager confirmed that the report highlighted any significant variances on the working budget, with an explanation and any impact on the 2015-2016 base budget. Also, that the traffic light system was used to mark the position of carry forward balances and approved efficiencies for the year. The Committee noted that any key items that influenced the financial health of the Council were monitored and reported as key Corporate Health indicators. The Accountancy Manager referred the Committee to the Executive Summary and Table 1 which confirmed that expenditure on the General Fund was estimated at £15.212M for the current year and was a net decrease of £380K on the working budget of £15.592M. Table 1 listed the significant changes to the General Fund. The AM reported that of the £351K carried forward from 2013 - 2014 to 2014- 2015 at the third quarter £188K had been spent with details at Table 2. The AM referred the Committee to Table 3 which gave a summary of all efficiency proposals for the current year which totalled £1.572M (an efficiency of 103.8 per cent) for the year. The AM confirmed that there had been an underspend on the working budget for 2014-2015 which would be carried forward to 2015-2016. The Committee noted the five key indicators listed in Table 4 and were pleased to observe that four were at green and one at amber. The AM referred the Committee to Tables 5 and 6 which gave the Projected General Fund Balances and Known Financial Risks respectively. The earmarked reserves which could be used to fund revenue expenditure were listed in Table 7 and the Committee noted that a total of £1,494K would be passed to the reserves in 2014 - 2015 with a total of £916K used to fund expenditure. This would then leave a projected amount in earmarked reserves at 31 March 2015 of £4.580M and that a significant part of this contribution would be Section 31 grant for the compensation of business rate reliefs. The AM next referred to the four main funding sources and advised that Council Tax and Business Rates were accounted for separately in the Collection Fund where Council had a £742K share of the collection fund deficit position and a contribution of £1.2M from the General Fund to the Collection Fund to make good this deficit. The Committee noted that there would be a deficit in the Collection Fund due to successful appeals on business rates with surplus due to an increase in Council Tax collection. The Accountancy Manager advised the Committee that two known financial risks had been realised; Increase of costs in temporary accommodation and reduced income from Building Control. The AM also advised that there was a potential risk of £130K as the company who collected cash from NHDC Car Park machines ‘Coin Co' had gone into administration at 30 November 2014. A Member enquired how this sum of £130K was reflected in the accounts and the AM advised that this sum would be placed in the 2014-2015 Statement of Accounts with a possible small dividend and some of the debt written off. The AM confirmed that Parking income was one of the financial risks included in the budget and Members noted this position. The AM also advised that the reduced income from Building Control was a 2013-2014 deficit and recouped in 2014-2015 from the General Fund with a carry forward to the Financial Statement In response to a question concerning the appointment of an Economic Policy Officer the Head of Finance, Performance and Asset Management advised that the strategy was under development in Planning Policy and the one off cost of £20K would be carried forward. The Chairman thanked the Accountancy Manager for the presentation of the report. RESOLVED: (1) That the proposed changes to the 2014-2015 General Fund budget as presented at Table 1 which gave a £380K decrease in net expenditure be noted; (2) That the proposed changes to the 2015 - 2016 General Fund Budget as presented at Table 1 which gave a £139K increase in net expenditure be noted. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee are informed on the third quarter Revenue Monitoring Report presented to Cabinet. |
Noted | ||
| 70 |
THIRD QUARTER CAPITAL MONITORING 2014-2015 Report Appendix A - Capital Programme Summary 2014-2015 onwards Appendix B - Capital Programme Detail 2014-2015 onwards The Accountancy Manager (AM) presented the revised report of the Strategic Director of Finance, Policy and Governance which would be presented to Cabinet on 24 March 2015. (The AM confirmed that the revised report was despatched to FAR Committee Members and substitutes on Friday 13 March 2015) The revised report was necessary due to the resolutions made by Council at the extra ordinary meeting held on 10 March 2015 (Minute 78 refers) that related to additional funds being allocated to the North Hertfordshire Museum and Community Facility. The Accountancy Manager referred the Committee to Tables 1 and 2 which detailed the Scheme Timetable Revision and Changes to the Capital Schemes in 2014-2015 respectively. However, the AM wished to concentrate on the additional costs for the new North Hertfordshire Museum and Community Facility as agreed by Council on 10 March 2015. Consideration had to be taken of a potential non payment from Hitchin Town Hall Ltd of £490K at the completion of the construction project and costs of treating moisture in the Town Hall basement of £30K. The AM advised that costs of this project were last updated in June 2014 where the total project budget was increased to £4.685M of which £3.755M would be spent in 2014 - 2015. The AM confirmed that there had been an eight week delay in the construction phase of the contract with an increase of costs of £69K and this had been covered by the Chief Executive under special emergency powers. The Accountancy Manager reminded Members that Council on 10 March approved an increase up to a maximum of £253K for additional variations to the North Herts Museum construction contract. This decision committed NHDC to a total budget in the capital programme of £5.007M. The AM confirmed that Council also agreed on 10 March that a further £490K would be allocated to Council resources in the event that Hitchin Town Hall Limited did not meet their contractual obligations. The AM advised that £2.856M would be spent on the Museum project at 31 March 2015 with the increased budget spent in the 2015-2016 financial year, and consequently the overall capital spend for 2014 - 2015 was now reduced by £899K. The AM also stated that there was a total of £351K of carried forward budgets from 2013-2014 into 2014-2015 and at the end of this third quarter £188K had been spent. The Accountancy Manager addressed the balance of useable capital receipts to fund capital expenditure for 2014-2015 and onwards which was £1.339M. The Committee noted that there was £23.3M in set aside receipts that could be used before external borrowing would be required. In order to complete the capital programme of £6.3M it would be necessary to take £5.3M from Capital Resources and consequently it would be necessary to draw down £3.8M of set aside receipts to fund the 2014-2015 programme. The AM advised that council land for disposal was expected to generate sales of some £4.75M in the next few months and that there could be a balance of £4.5M remaining in useable capital receipts at 1 April 2015. The AM stressed that it was very important to seek additional monies from third parties and grants and that a total of £861K including £270K of Section 106 receipts would contribute to the 2014 - 2015 capital programme. The Accountancy Manager concluded his update on the Capital Programme and stated that there should be a close monitoring review of the capital programme due to limited availability of capital receipts and the consequences of the limited availability of set aside receipts. In addition the AM stated that caution should be taken when capital receipts were used and not replaced as the availability of cash for investment would be reduced. The Chairman thanked the Accountancy Manager for the update on the Capital Programme in 2014 - 2015 and the budget consequences from the specific impact of the additional costs required to support the North Hertfordshire Museum and Community Facility at Hitchin Town Hall. RESOLVED: (1) That the changes to the projected capital programme for 2014 - 2015 arising from the re-profiling of schemes giving a decrease in expenditure to £1.978M in 2014-2015 as listed at Table 1 be noted; (2) That the changes to the projected capital programme for 2014 -2015 arising as a result of changes to the capital schemes giving a net decrease in expenditure of £53K as listed at Table 2 be noted; (3) That the proposed changes to the projected capital programme for 2014 - 2015 and onwards arising from the decision taken by the Chief Executive under the special emergency procedure to expend £69K and the decision taken by Full Council at the extra ordinary meeting held on 10 March 2015 concerning the new North Hertfordshire Museum and Community Facility to increase the budget to a maximum of £253K be noted; (4) That the proposed re-profiling of the North Hertfordshire Museum and Community Facility scheme into 2015 - 2016 that reflected the latest timetable for completion resulting in a net increase in expenditure of £899K in 2014-2015 be noted. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee are advised of changes in the third quarter Capital Monitoring for 2014-2015 as to be presented to Cabinet. |
Noted | ||
| 71 |
TREASURY MANAGEMENT THIRD QUARTER 2014 - 2015 Report Appendix A - Treasury Management Update, December 2014 The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was a report to Cabinet for the meeting on 24 March 2015. The Accountancy Manager confirmed that this was the third monitoring report for 2014-2015 and restated that there had only been one breach to the treasury limits reported to date which had exceeded the investment limit with Lloyds Banking Group for a few days. The AM was pleased to report that all treasury activity had operated within the indicators and limits. The Accountancy Manager referred the Committee to Appendix A which gave an update on the treasury position by Capita Treasury Solutions including data on economic background, interest rate forecast, a summary outlook of the background to Treasury activities and include an update on the NHDC Investment Strategy. The Committee noted that £384K of interest had been generated in the first nine months of 2014-2015 where the average interest rate on new deals was 1.0 per cent and that the average rate on all outstanding investments was 1.48 per cent at 31 December 2014. The AM confirmed that NHDC had 17 per cent of investments with UK banks and 83 per cent of investments with UK building societies. At the end of the third quarter there was £5M invested for longer than 364 days (as per the Treasury Strategy). The AM reminded the Committee that the contract with Sterling had been terminated (29 January 2014 - Minute 57 refers) and consequently £3.5m of funds maturing at 31 March 2015 would be retained in - house to fund Capital Expenditure. The balance of £13m would be divided into £8.5M for Tradition (a total of £23.5M) and the remaining £4.5M retained in house. The Accountancy Manager concluded the update by advising that the projected interest income for 2014-2015 was £485M which was just below the working budget of £493K. In response to a question regarding the impact of lower interest rates the AM was unable to confirm the outcome of reduced rates at the moment. The Chairman thanked the Accountancy Manager for the update on the Treasury Management Programme in 2014 - 2015 and the specific changes for cash management due to the departure of Sterling. RESOLVED: (1) That the information regarding Treasury Management at the end of the third quarter 2014-2015 be noted; (2) That the performance against the Prudential Treasury Indicators be noted. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee are regularly informed of any movements in the investment programme within the NHDC Treasury Strategy as to be presented to Cabinet. |
Noted | ||
| 72 |
FUTURE MEETINGS - POSSIBLE AGENDA ITEMS The Chairman requested that should any Members have any suggestions for agenda items at future meetings would they please advise himself, officers or the Committee Clerk. |
Noted | ||