| Time: | 7.30pm | Place: | Council Chamber, Council Offices, Gernon Road, Letchworth Garden City |
| PRESENT: | Councillor M.E. Weeks (Chairman), Councillor Simon Harwood (Vice-Chairman), Councillor Ian Albert, Councillor John Bishop, Councillor S.K. Jarvis (substitute), Councillor Jim McNally and Councillor Deepak Sangha. |
| IN ATTENDANCE: | Norma Atlay - Strategic Director of Finance, Policy and Governance Ian Couper - Head of Finance, Performance and Asset Management Antonio Ciampa - Accountancy Manager David Charlton - Senior Estates Surveyor Ian Gourlay - Committee and Member Services Manager Kay Storey - Manager (Govt. & Public Sector), Ernst & Young Suresh Patel - Audit Executive Director, Ernst & Young Debbie Hanson - Outgoing Audit Executive Director, Ernst & Young |
| ALSO PRESENT: | |
| Meeting attachments |
Agenda Front Pages Audio Recording of Meeting |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 36 |
APOLOGIES FOR ABSENCE The Chairman welcomed Suresh Patel (Audit Executive Director, Ernst & Young), who was attending his first meeting of the Committee in succession to the outgoing Executive Director, Debbie Hanson. Apologies for absence were submitted on behalf of Councillor Terry Tyler. Councillor Steve Jarvis was substituting for Councillor Tyler. |
Noted | ||
| 37 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 22 September 2016 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 38 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 39 |
CHAIRMAN'S ANNOUNCEMENTS (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. (3) At the Chairman's invitation, the Strategic Director of Finance, Policy and Governance stated that only 3 Members (including the Committee Chairman) had completed the Bribery Act E-Learning module. She encouraged all Members, especially those serving on the Finance, Audit & Risk Committee, to complete the E-Learning module as soon as possible. |
Noted | ||
| 40 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 41 |
NORTH HERTFORDSHIRE DISTRICT COUNCIL - ANNUAL AUDIT LETTER 2015/16 Cover Page NHDC Annual Audit Letter 2015-16 The Outgoing Audit Executive Director, Ernst and Young, presented the Annual Audit Letter. The Outgoing Audit Executive Director advised that the Letter was very positive. Ernst and Young had issued unqualified opinions on both the Council's financial statements and the value for money conclusion. The audit work had been completed and the audit certificate issued on 22 September 2016, in advance of the statutory deadline of 30 September 2016. The Outgoing Audit Executive Director stated that no significant issues had been identified during the audit. However, two significant risks were identified. The first was in relation to management override, and the second was in respect of the financial pressures on the Council, in common with most other local authorities. Once some additional audit procedures had been carried out with regard to addressing these two risks, there were no issues arising that required further report. The Outgoing Audit Executive Director explained that the Letter was intended to be a more user friendly document than the Audit Results report considered by the Committee in September 2016. It enabled stakeholders to gain a high level overview of the audit work undertaken. The Committee was pleased with the content of the Letter, and viewed it as a credit to staff in the Finance Department and all other NHDC officers who had assisted in the audit. RESOLVED: That the Annual Audit Letter be noted. REASON FOR DECISION: To communicate to Members the key issues arising from Ernst and Young's audit work for 2015/16. |
Noted | ||
| 42 |
LAND AND PROPERTY REVIEW Report The Senior Estates Surveyor presented a report of the Head of Finance, Performance and Asset Management in respect of a Land and Property Review. The Senior Estates Surveyor advised that the report provided an update on land and property disposals between 2011 and 2016. Five sites had been sold for housing which had generated £5.85million of capital receipts, with 43 homes constructed and around a further 23 expected (as set out in Table 1 of the report). Three sites had been sold for other purposes and had generated receipts of £110,000 (as set out in Table 2 of the report). Three sites had been leased. The Senior Estates Surveyor stated that the report also provided an update on progress made in relation to land and property that had previously been approved for disposal. The progress with 14 such sites was detailed in Table 4 of the report. The Committee noted that the report also sought Cabinet approval to investigate disposal options for three new sites, as detailed in Table 5 of the report. The Committee was concerned that some of the sites contained in Table 4 of the report, and which indicated a potential use for housing, had not been included as sites in the emerging North Hertfordshire Local Plan. The Strategic Director of Finance, Policy and Governance commented that the list of sites in the report referred to the Council's role as Landowner in the management of its assets, as distinct to the Council's role as Local Planning Authority in approving a Local Plan for the District. She explained that discussions with Planning Officers had previously occurred in respect of the sites, and whilst they remained on the asset disposals list, where they had not been included in the emerging Local Plan, that may make them unsuitable for development in planning terms at the current time. The Committee acknowledged the views of the Strategic Director of Finance, Policy and Governance. However, Members' concerns persisted, and the Committee considered that Recommendation 2.2 of the report regarding the sites listed for disposal in Table 4 should be expanded to ensure that account be taken of the emerging North Hertfordshire Local Plan. RECOMMENDED TO CABINET: That Recommendation 2.2 in the report be expanded to read "That Cabinet notes that options for the sites previously approved for disposal as listed in Table 4 of the report are still being progressed, but that account should be taken of the emerging North Hertfordshire Local Plan". REASON FOR DECISION: To provide comments to Cabinet on the Land and Property Review. |
Agreed | ||
| 43 |
APPOINTMENT OF EXTERNAL AUDITORS FOR 2018/19 ONWARDS Report The Head of Finance, Performance and Asset Management presented a report in respect of the appointment of External Auditors for 2018/19 onwards. The Head of Finance, Performance and Asset Management advised that the Local Audit and Accountability Act 2014 had abolished the Audit Commission. For an interim period, Public Sector Audit Appointments Ltd (PSAA) had arranged for audits to be undertaken by audit firms. However, for audits from 2018/19, local authorities were required to appoint their own auditors. The Head of Finance, Performance and Asset Management commented that, whilst there were options available that allowed local authorities to have greater control over the process, it was considered that sector wide procurement would deliver cost and process efficiencies. This could be achieved by entering into the joint procurement arrangements undertaken by the PSAA. The Head of Finance, Performance and Asset Management stated that auditors for 2018/19 needed to be appointed by 31 December 2017. The PSAA was therefore looking to award contracts by June 2017. To achieve this timing, the period for joining the PSAA arrangements was up until 9 March 2017. The Head of Finance, Performance and Asset Management referred to the advantages of using the PSAA process, as described in Paragraph 7.4 of the report, and alternatives to using the process were set out in Paragraph 7.5 of the report. The report concluded that the PSAA option was considered to be the best one for the Council to choose. The Committee noted that the maximum appointment period allowed by the regulations was 5 years. A maximum period was set as it helped to ensure the independence of the auditor. Appointing up to this maximum provided two advantages - it reduced the time taken up by re-procurement; and the auditor would build up a knowledge of the Council's systems and processes which could make the audit process more efficient. In response to a Member's question, the Head of Finance, Performance and Asset Management commented that, as the PSAA process was new, there was no benchmarking information available to fully compare the benefits of it with other options, such as pooling with other Hertfordshire Authorities; however, the PSAA had an incentive to ensure value for money, otherwise authorities would not engage in future programmes. The Strategic Director of Finance, Policy and Governance added that, in any event, the other Hertfordshire Authorities and some 180 authorities who were members of the Society of District Council Treasurers had indicated a preference for adopting the PSAA process. RECOMMENDED TO CABINET: That Council be requested to approve that the Council opts in to the appointing person arrangements made by Public Sector Audit Appointments Ltd (PSAA) for the appointment of external auditors, for a period of 5 years from the 2018/19 audit. REASON FOR DECISION: To comply with the requirement under Regulation 19 of the Local Audit (Appointing Person) Regulations 2015 to appoint an external auditor; and to take forward the option that is most likely to provide the best value for money, both in terms of cost and time taken to deliver. |
Agreed | ||
| 44 |
SECOND QUARTER REVENUE BUDGET MONITORING 2016/17 Report The Accountancy Manager presented the report of the Strategic Director of Finance, Policy and Governance in respect of the Second Quarter Revenue Budget Monitoring 2016/17, and advised that the report was before this Committee for consideration prior to presentation to Cabinet on 22 November 2016. The Accountancy Manager advised that, as at 30 September 2016, there was a £19,000 increase in net spend for 2016/17. Table 2 in the report detailed the major budget variances. The cost projections included: - The cost of redundancy, pay in lieu and pension strain following the restructure of senior management. These were partially offset by the salary cost savings realised in the remainder of the year - £211,000; - Increased revenue from parking income as activity in the first half of the year was higher than budgeted - £180,000; and - Cost of commissioning a consultant to undertake the review of the Parking Strategy and a parking survey - £80,000. In terms of the impact on future years, the Accountancy Manager stated that there was a decrease in the net budget for 2017/18 of £172,000. The Accountancy Manager referred to Table 3 of the report concerning the Council's Key Financial Health Indicators, all five of which were at "green" status. In respect of the Collection Fund, the Accountancy Manager commented that it was currently forecast that there would be a surplus of Council Tax of approximately £200,000 and a deficit on Business Rates of around £700,000. Hertfordshire County Council had advised that, as a result of being in the Business Rates pool, NHDC should benefit from pooling gain by approximately £200,000 in 2017/18. The Accountancy Manager concluded by referring to Table 5 in the report, which confirmed that the projected General Fund balance at the end of the financial year would be very similar to that forecast at the beginning of the financial year (as approved by Council in February 2016). In response to a Members' question, the Strategic Director of Finance, policy and Governance explained that consultants were to be used to complete work on the Parking Strategy, as in-house resources had been diverted to assist in the extensive amount of work on the emerging North Hertfordshire Local Plan. RESOLVED: That the Second Quarter Revenue Budget Monitoring report 2016/17 be noted. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Second Quarter Revenue Monitoring report 2016/17. |
Noted | ||
| 45 |
SECOND QUARTER CAPITAL PROGRAMME MONITORING 2016/17 Report Appendix A - Capital Programme Summary 2016/17 onwards Appendix B - Capital Programme Detail 2016/17 onwards The Accountancy Manager presented the report of the Strategic Director of Finance, Policy and Governance in respect of the Second Quarter Capital Programme Monitoring 2016/17, and advised that the report was for consideration prior to presentation to Cabinet on 22 November 2016. The Accountancy Manager advised that £1.416million worth of Capital schemes had been re-profiled into 2017/18. The main adjustments were highlighted in Table 2 of the report. The Accountancy Manager explained that the major element of re-programming was due to the impact of Local Plan work on officer time. Accordingly, fewer staff resources had been available to commission many of the projects listed in the programme, including the Cycle Strategy and Transport Plans implementation. The Accountancy Manager referred to Table 3 in the report, which itemised how the planned capital expenditure would be financed. If the £33million programme was spent by 2019/20, then the Council would have little left of its capital reserves to fund new projects. The Accountancy Manager commented that, by the end of 2016/17, the level of capital reserves would fall below £20 million. As detailed in the Medium Term Financial Strategy, this required that a review of funding was undertaken. This would be incorporated in to the Capital programme report for 2017/18 to 2020/21. In response to a Member's questions, the Strategic Director of Finance, Policy and Governance stated that senior officers had been asked to look closely at all capital projects, both in terms of prioritisation and to ensure that sufficient resources would be allocated to each project in an endeavour to reduce the level of re-profiling required in the future. RESOLVED: That the First Quarter Capital Programme Monitoring report 2016/17 be noted. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Second Quarter Capital Monitoring report 2016/17. |
Noted | ||
| 46 |
TREASURY MANAGEMENT SECOND QUARTER 2016/17 Report Appendix A - Treasury Management Mid Year Review, September 2016 The Accountancy Manager presented the report of the Strategic Director of Finance, Policy and Governance in respect of the Treasury Management Second Quarter 2016/17, and advised that the report was for consideration prior to presentation to Cabinet on 22 November 2016. The Accountancy Manager advised that, as at 30 September 2016, the forecast for annual investment income was the same as that reported at the end of the First Quarter, namely £427,000. The Accountancy Manager commented that the Council had continued to operate within its approved Treasury Management Strategy and in compliance with Treasury management practices. He referred to the change in the Base Interest Rate since August 2016, although the impact of this on the Council had been offset by higher balances available due to the re-profiling of the Capital Programme. RESOLVED: That the Treasury Management Second Quarter Monitoring report 2016/17 be noted. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Treasury Management Second Quarter Monitoring report 2016/17. |
Noted | ||
| 47 |
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 | ||