| 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 Mrs A.G. Ashley (substitute) and Councillor John Bishop. |
| IN ATTENDANCE: | Norma Atlay - Strategic Director of Finance, Policy and Governance Dean Fury - Corporate Support Accountant Fiona Timms - Performance and Risk Manager Howard Crompton - Head of Revenue, Benefits and IT Jeanette Thompson - Acting Senior Lawyer James Ellis - Advisory and Litigation Lawyer Ian Gourlay - Committee and Member Services Manager Nick Jennings - Shared Anti-Fraud Service Manager (Shared Anti-Fraud Services) David De Smet - Principal Auditor (Shared Internal Audit Services) Kay Storey - Manager (Govt. & Public Sector), Ernst & Young |
| ALSO PRESENT: | 1 member of the public. |
| Meeting attachments |
Agenda Front Pages Audio Recording of Meeting |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 65 |
APOLOGIES FOR ABSENCE Apologies for absence were submitted on behalf of Councillors Simon Harwood, Lorna Kercher, Jim McNally and Deepak Sangha. Councillor Allison Ashley was substituting for Councillor Harwood. |
Noted | ||
| 66 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 25 January 2016 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 67 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 68 |
CHAIRMAN'S ANNOUNCEMENTS (1) The Chairman announced that Members of the public and the press may use their devices to film/photograph, or do a sound recording of the meeting, but he asked them to not use flash and to disable any beeps or other sound notifications that emitted from their devices. In addition, the Chairman had arranged for the sound at this particular meeting to be recorded; and (2) The Chairman advised that, in line with the Code of Conduct, any Declarations of Interest should be declared immediately prior to the item in question. |
Noted | ||
| 69 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 70 |
AUDIT PLAN - YEAR ENDING 31 MARCH 2016 Cover Page Audit Plan - Year Ending 31 March 2016 Local Government Audit Committee Briefing The Manager (Government & Public Sector), Ernst and Young, presented the Audit Plan for the year ending 31 March 2016. The Manager (Government & Public Sector) referred to the Plan overview set out in Section 1 of the document and the work required to give: - Ernst and Young's opinion on whether the financial statements of NHDC give a true and fair view of the financial position as at 31 March 2016 and of the income and expenditure for the year then ended; and - Ernst and Young's conclusion on the Council's arrangements to secure economy, efficiency and effectiveness. The Manager (Government & Public Sector) drew attention to the significant risk identified in Section 2, namely the generic "Risk of Management Override". The audit approach to safeguard against this risk would be through the testing of journal entries, reviewing the accounting estimates for evidence of managerial bias, and evaluating the business rationale for significant unusual transactions. The responsibilities in respect of fraud and error were set out in Section 2.1 of the report. The Manager (Government & Public Sector) explained that the value for money risks were identified in Section 3 of the report. The most significant value for money risk related to the level of savings required by the Council (£3million over the next four years). The Manager (Government & Public Sector) referred to Section 4, which detailed some background to the audit process and strategy. In relation to section 4.4, Ernst and Young had determined that overall materiality for the financial statements of the Council was £1.4million based on 2% of expenditure. Ernst and Young would communicate to the Council any uncorrected audit misstatements greater than £70,300. Section 4.7 provided a timeline, which showed Ernst and Young as delivering their audit opinion in September 2016. The Manager (Government & Public Sector) drew attention to Appendix A to the report regarding fees. She confirmed that the planned audit fee for 2015/16 would be £52,037, in line with the scale fees for the work. The Chairman thanked the Manager (Government & Public Sector) for the report and the attached Local Government Audit briefing Paper, which raised a number of challenging issues. RESOLVED: That the Audit Plan for the Year ending 31 March 2016 be noted. REASON FOR DECISION: To provide the Committee with a basis to review the proposed audit approach and scope for the 2015/16 audit in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office's 2015 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Appointments (PSAA) Ltd, auditing standards and other professional requirements. |
Noted | ||
| 71 |
ANTI-BRIBERY POLICY REVIEW 2015/16 Report Appendix A - Clean version of amended Policy Appendix B - Tracked changes version of the amended Policy The Acting Senior Lawyer presented a report on the Anti-Bribery Policy Review 2015/16. The Acting Senior Lawyer advised that the Anti-Bribery Policy was last reviewed in 2011, prior to the implementation date of the Bribery Act 2010. Since the 2011 Policy review, the Council had received various alerts and national plans concerned with anti-corruption and anti-bribery. The Acting Senior Lawyer commented that there had been a relatively small number of prosecutions nationally since the 2010 Act came into force. Anecdotally, it was believed that this was due to the complexity of some of the matters, together with the fact that the Serious Fraud Office had been focussing on foreign bribery issues. The Acting Senior Lawyer stated that the Policy had been amended to include a greater level of description and guidance on what bribery was and indicators of it. The Policy was applicable to all employees, agency workers, contractors and Members. The Acting Senior Lawyer explained that the Council still needed to consider the necessity for: (a) the training to be provided to employees (and level); and (b) the reporting and monitoring arrangements the Council had in place (and whether these could be improved). In respect of training, and following liaison with the Hertfordshire Shared Anti-Fraud Service (SAFS), the Acting Senior Lawyer advised that this would be facilitated through an e-learning package to be offered to all staff and Members. She estimated that it would take most staff and Members about 15 minutes to complete the e-learning module. In respect of monitoring/reporting, the Acting Senior Lawyer stated that it had been suggested by the SAFS Counter Fraud Manager that a good way to improve monitoring and reporting would be the introduction of an annual corporate employee declaration (and that record could be held on their Human Resources file). In response to a request from a Committee Member, the Acting Senior Lawyer undertook to advise all Members in April 2016, via the Members' Information Service, when the new e-learning module was available for use. In relation to the proposed amended Policy, the Committee agreed to recommend to Cabinet that the definition of bribery in the previous Policy should be re-inserted in Section 1 of the new Policy. RECOMMENDED TO CABINET: That, subject to the re-insertion in the Policy of the following definition of bribery in Section 1 of the document, the amendments to the Anti-Bribery Policy, as set out in Appendix B to the report, be approved: "Bribery is an inducement or reward offered, promised or provided to gain personal, commercial, regulatory or contractual advantage. Bribery is a criminal offence. North Hertfordshire District Council does not, and will not, pay bribes or offer improper inducements to anyone for any purpose, nor does the Council or will the Council, accept bribes or improper inducements." REASON FOR DECISION: To comply with a recent legislative review of the UK Bribery Act 2010 and good practice; and to provide a degree of uniformity within the Hertfordshire Shared Anti-Fraud Services authorities. |
Agreed | ||
| 72 |
WHISTLEBLOWING POLICY REVIEW 2015/16 Report Appendix A - Clean version of amended Policy Appendix B - Tracked changes version of amended Policy The Acting Senior Lawyer presented a report on the Whistleblowing Policy Review 2015/16. The Acting Senior Lawyer advised that the Policy had been last reviewed in 2014, but that there had been a considerable amount of national guidance produced in the past two years, as set out in Paragraph 7.2 of the report. The major policy changes were set out in Paragraphs 8.1 to 8.4 of the report. The Acting Senior Lawyer commented that the Human Resources Team was currently investigating the best methods for the training and re-training of all staff in the requirements of the revised Policy. This would be considered by the Senior Management Team (SMT), who were committed to provide appropriate awareness and training. RESOLVED: That the amendments to the Whistleblowing Policy, as set out in Appendix B to the report, be supported. REASON FOR DECISION: To ensure consistency and good governance within the Council; and to reflect changes set out in the Whistleblowing Guidance for Employers and Code of Practice from the Department of Business Innovation and Skills and recent case law. |
Agreed | ||
| 73 |
UPDATE ON SHARED ANTI-FRAUD SERVICE (SAFS) Report Appendix 1 - Anti-Fraud and Corruption Policy Appendix 2 - SAFS Business Plan 2015/16 Appendix 3 - Proposed SAFS Anti-Fraud Action Plan 2016/17 Appendix 4 - TEICCAF Fraud Briefing Appendix 5 - Draft Fraud Prosecutions and Sanctions Policy The Shared Anti-Fraud Service (SAFS) Manager presented a progress report on the work of the Service since its launch on 1 April 2015. The SAFS Manager stated that he would be removing Appendix 4 to the report (The European Institute for Combatting Corruption and Fraud Briefing Paper), as it had been considered that the quality of information contained in the document had been questioned at previous Audit Committees. The SAFS Manager referred to the structure of the SAFS Team, as set out in Paragraph 8.1 of the report. It was the intention that each SAFS Partner received dedicated support and response from the Team in a transparent way. At present, the most effective way to do this was by allocating one SAFS Team Officer to each Partner. Tracy Reeves was the SAFS Counter Fraud Officer (CFO) working with NHDC. Tracy was a fully accredited Investigator with more than 20 years' experience. The SAFS Manager took the Committee through the statistics set out in Paragraph 8.6 of the report relating to the types of fraud being reported; who was reporting fraud; the outcome of closed cases; and the status of cases still under investigation. To the end of February 2016, NHDC fraud losses of £33,000 had been identified and further savings of £61,000. The SAFS Manager drew attention to the various Pilot projects carried out by the Service, as set out in Paragraphs 8.9 to 8.15 of the report. The SAFS Manager introduced the Committee to the Anti-Fraud and Corruption Policy attached as Appendix 1 to the report. He also advised Members of performance against Anti-Fraud Action Plan 2015/16, as attached at Appendix 2 to the report, and the Anti-Fraud Action Plan for 2016/17 at Appendix 3. It was noted that the SAFS Manager would provide a full report to the Committee in September 2016 on the Council's anti-fraud performance and SAFS activities in 2015/16. This would include the number of, and types of, cases investigated with outcomes and the financial savings identified from all anti-fraud activity. In March 2017, SAFS would provide a revised Anti-Fraud Business Plan for 2017/18. The SAFS Manager explained that, due to the varied types of fraud being investigated across services provided by the Council, it had been necessary to create a new policy that stated how offenders would be dealt with where fraud was identified. The draft Fraud Prosecution Policy set out at Appendix 5 to the report included various options, using the appropriate legislation for each and outlining how the decision-making process would be followed. The Committee was asked to approve this new policy for use from April 2016, superseding any previous polices that dealt with benefit fraud prosecutions and having regard to the Council's published ‘Statement of Enforcement Policy'. In respect of the new Fraud Prosecution Policy, the Committee supported its introduction, subject to the "Introduction" paragraph being moved above the "Policy Statement" section. RESOLVED: (1) That the progress of the Shared Anti-Fraud Service (SAFS) in its first year be noted; (2) That the progress against the SAFS Business Plan for 2015/2016, as set out in Appendix 2 to the report, be noted: (3) That the SAFS/NHDC Anti-Fraud Action Plan for 2016/2017, as attached at Appendix 3 to the report, be approved; (4) That, subject to the "Introduction" paragraph being moved above the "Policy Statement" section, the new Fraud Prosecution Policy for use from 1 April 2016, as attached at Appendix 5 to the report, be supported. REASON FOR DECISION: To enable the Committee to monitor the progress and development of SAFS and to keep members advised on current fraud matters. |
Agreed | ||
| 74 |
SHARED INTERNAL AUDIT SERVICES - UPDATE ON PROGRESS AGAINST THE 2015/16 AUDIT PLAN Cover Page SIAS Update on progress against the 2015/16 Audit Plan The Principal Auditor (Shared Internal Audit Services - SIAS) advised that since the last update report to the Committee in December 2015, SIAS had issued a further 6 final reports. Since the Committee report was published, the NDR report had been issued with a substantial level of assurance, and two further draft reports had been issued. In respect of performance indicators, the Principal Auditor commented that, at 4 March 2016, SIAS had delivered 81% of its billable days and 65% of its planned projects. In the two week prior to the meeting, the position had improved to 90% and 71%, respectively. The Principal Auditor referred to Appendix A to the report, which showed the status of all projects as at 4 March 2016. Appendix B showed the implementation status of the one High priority Recommendation (which would be carried forward to June 2016), and Appendix C showed the start dates for audits carried out in 2015/16. RESOLVED: (1) That the Internal Audit progress report for the period to 4 March 2016 be noted; (2) That the amendments to the Audit Plan as at 4 March 2016 be approved; and (3) That the implementation status of high priority recommendations be noted. REASON FOR DECISION: To allow the Committee to review, comment and challenge the current status of the Internal Audit Plan. |
Agreed | ||
| 75 |
NHDC INTERNAL AUDIT PLAN 2016/17 Cover Page SIAS 2016/17 Internal Audit Plan The Principal Auditor (Shared Internal Audit Services - SIAS) advised that the proposed NHDC Audit Plan 2016/17 set out a programme of work which had been produced in compliance with the Public Sector Internal Audit Standards. The Plan had been agreed by the NHDC Senior Management Team. The Principal Auditor stated that Appendix A showed the proposed Plan, which provided a scope for each of the areas to be audited, together with the number of days to be allocated to each one. Included at Appendix B was a reserve list of audits that could be brought forward should any of the proposed audits be cancelled or deferred. The Principal Auditor emphasised that the Plan would almost certainly change through the year, with any changes being reported by SIAS to the Committee on a regular basis. RESOLVED: That the proposed NHDC Internal Audit Plan for 2016/17 be approved. REASON FOR DECISION: To ensure that the Committee was aware of the proposed NHDC Internal Audit Plan for 2016-2017. |
Agreed | ||
| 76 |
RISK MANAGEMENT UPDATE Report The Performance and Risk Manager presented a report which provided an update on Risk Management. The Performance and Risk Manager advised that, following the Full Council resolution of 11 February 2016 "That work on the Churchgate project cease", the Churchgate Project Board at its meeting on 15 February agreed that the current risk for Churchgate and Surrounding Area should be deleted as a Top Cabinet risk. This followed the repeated unsuccessful attempts to find a viable and acceptable solution for the Churchgate Centre and surrounding area during the course of the project. The Committee was informed that the Churchgate risk had been monitored and updated regularly by the Project Board throughout the period of the project and reported as part of the Council's risk management procedures. This did not preclude the Council from exploring the possibility of acquiring the Churchgate Centre, as agreed by Full Council, or from taking a more strategic view of the site as part of the emerging Local Plan. Nor did it preclude interested parties from approaching the Local Planning Authority in the interim. There were risks in place that covered the production of the Local Plan, the Council's financial procedures and the vitality and viability of the District's town centres. Should the need arise, and depending on the approach being taken, a new risk would be prepared and reported through the Council's risk management procedures. The Committee supported the recommendation that "Churchgate and the surrounding area" be removed as a Top Risk. RECOMMENDED TO CABINET: That "Churchgate and the surrounding area" be removed as a Top Risk. REASON FOR DECISION: To comply with the requirements of the Risk and Opportunities Management Strategy. |
Agreed | ||
| 77 |
REVIEW OF ANNUAL GOVERNANCE STATEMENT ACTION PLAN AND LOCAL CODE OF CORPORATE GOVERNANCE Report Appendix A - Revised Local Code of Corporate Governance The Advisory and Litigation Lawyer presented a report in respect of a review of the Annual Governance Statement Action Plan and the Local Code of Corporate Governance. The Advisory and Litigation Lawyer advised that the first part of the report related to actions arising out of the 2014/15 Annual Governance Statement for implementation in 2015/16. The identified actions were set out in the table at paragraph 8.1 of the report. It was noted that the majority of the actions had been completed. The Advisory and Litigation Lawyer explained that the second part of the report was in respect of the revised Local Code of Corporate Governance, attached at Appendix A to the report, which now contained the new corporate objectives for the Council. The Advisory and Litigation Lawyer stated that the third part of the report requested the Chairman of the Committee to sign an assurance statement to support the production of the Annual Governance Statement for 2015/16. There would be some changes coming forward as CIPFA had introduced a new framework for 2016. This would be considered by the Committee at its June 2016 meeting. RESOLVED: (1) That the current positions with the Annual Governance Statement actions for implementation in 2015/16 be noted; (2) That the revised Local Code of Corporate Governance, as attached at Appendix A to the report, be approved; and (3) That the Chairman of the Committee completes an Assurance Statement to support the production of the Annual Governance Statement for 2015/16. REASON FOR DECISION: To provide assurances that the Council is improving its governance arrangements. |
Agreed | ||
| 78 |
THIRD QUARTER REVENUE MONITORING 2015/16 Report Appendix A - Genral Fund Summary The Corporate Support Accountant presented the report of the Strategic Director of Finance, Policy and Governance in respect of the Third Quarter Revenue Budget Monitoring for 2015/16, and advised that the report was before this Committee for consideration prior to presentation to Cabinet on 30 March 2016. The Corporate Support Accountant advised that the report was seeking to decrease net expenditure in 2015/16 by £179,000 and to increase net expenditure in 2016/17 by £295,000. Both of these figures included carry forward of £129,000 into 2016/17. The Corporate Support Accountant reported that the projected General Fund Budget for 2015/16 was now £16.258million. He highlighted the major variances to the Budget, as set out in Table 1 of the report. It was currently anticipated that £35,000 of the £113,000 Strategic Priorities Fund for 2015/16 would remain unallocated and would be carried forward into 2016/17. The Corporate Support Accountant referred to Table 2 of the report, which outlined six projects which would be carried forward into 2015/16 from 2014/15. Table 5 confirmed that £6.152million would be the balance of the General Fund Reserve at the end of the 2015/16 financial year, in order to cover known and unknown financial risks. In addition, the earmarked reserves position at the end of 2015/16 was projected to be £4.649million. Table 6 showed that the remaining allowance for known financial risks was £422,000. RESOLVED: That the Third Quarter Revenue Budget Monitoring Report 2015/16 be noted. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Third Quarter Revenue Monitoring report 2015/16. |
Noted | ||
| 79 |
THIRD QUARTER CAPITAL MONITORING 2015/16 Report Appendix A - Capital Programme Summary 2015/16 onwards Appendix B - Capital Programme Detail 2015/16 onwards The Corporate Support Accountant presented the report of the Strategic Director of Finance, Policy and Governance in respect of the Third Quarter Capital Programme Monitoring 2015/16, and advised that the report was for consideration prior to presentation to Cabinet on 30 March 2016. The Corporate Support Accountant reminded the Committee that the total capital expenditure in 2014/15 had been £4.532million, and that a remaining useable capital receipt balance of £851,000 had been available as at 1 April 2016. The Capital programme at the start of 2015/16 was £12.384million, but a £1,558million reduction in the Programme was approved in December 2015, giving revised projected expenditure for 2015/16 of £10.798million. The Corporate Support Accountant stated that the report sought approval to reduce the Capital Budget by a further £6.188million (£5.895 due to a re-profiling of schemes into 2016/17 and £293,000 due to changes in 2015/16 schemes). After these reductions, the total Capital budget for 2015/16 was £4.610million. The Corporate Support Accountant drew attention to the fact that £1.103million worth of IT schemes required Council approval as part of the Capital Programme for 2016/17 onwards, as detailed in Table 3 of the report. The Corporate Support Accountant reported that there had been no capital receipts achieved during the third quarter, and therefore that the balance to fund capital projects remained at £5.674million. Of that sum, it was proposed to use £1.22million, leaving a balance of £4.5million. The remaining Capital programme would be funded through the drawing down of investments and third party grants/contributions. RESOLVED: That the Third Quarter Capital Programme Monitoring Report 2015/16 be noted. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Third Quarter Capital Monitoring report 2015/16. |
Noted | ||
| 80 |
TREASURY MANAGEMENT THIRD QUARTER 2015/16 Report Appendix A - Treasury Management Update December 2015 The Corporate Support Accountant presented the report of the Strategic Director of Finance, Policy and Governance in respect of the Third Quarter Treasury Management Monitoring 2015/16, and advised that the report was for consideration prior to presentation to Cabinet on 30 March 2016. The Corporate Support Accountant advised that the Council had generated £339,000 worth of interest during the first nine months of 2015/16. No new deals had been placed by Tradition. In-house, the average interest rate on all new investments was 0.51%. The average interest rate on all outstanding investments at 31 December 2015 was 1.26%. The Corporate Support Accountant stated that, at the end of December 2015, the Council had £52.4million worth of investments (58% with building societies and 42% with banks). The Council had 20% (£10.5million) invested for longer than 364 days. The Corporate Support Accountant advised that the total amount of interest expected to be generated during 2015/16 was £451,000, an increase on the working budget of £20,000, and an increase on the original budget of £88,000. RESOLVED: That the Third Quarter Treasury Management Monitoring Report 2015/16 be noted. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Third Quarter Treasury Management monitoring report 2015/16. |
Noted | ||
| 81 |
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. The Chairman advised that this would be the final meeting of the Committee attended by the Vice-Chairman (Councillor John Booth) before he took up the position of Chairman of the Council for the 2016/17 Civic Year. The Committee supported the Chairman in giving a vote of thanks to Councillor Booth for his contribution to the work of the Committee for the past six years. |
Noted | ||