Agenda, decisions and draft minutes

Members are required to notify any substitutions by midday on the day of the meeting.

Late substitutions will not be accepted and Members attending as a substitute without having given the due notice will not be able to take part in the meeting.

Apologies for absence were received from Councillors Steven Patmore, Vijaiya Poopalasingham and Dominic Griffiths.

Having given due notice Councillor Ralph Muncer substituted for Councillor Patmore and Councillor Nigel Mason substituted Councillor Poopalasingham.

Audio recording – 1 minute 48 seconds

Apologies for absence were received from Councillors Steven Patmore, Vijaiya Poopalasingham and Dominic Griffiths.

Having given due notice Councillor Ralph Muncer substituted for Councillor Patmore and Councillor Nigel Mason substituted Councillor Poopalasingham.

To take as read and approve as a true record the minutes of the meeting of the Committee held on the 8 January 2025.

RESOLVED:That the Minutes of the Meeting of the Committee held on 8 January 2025 be approved as a true record of the proceedings and be signed by the Chair.

Audio recording – 2 minutes 26 seconds

Councillor Sean Nolan, as Chair, proposed and Councillor Ralph Muncer seconded and, following a vote, it was:

RESOLVED: That the Minutes of the Meeting of the Committee held on 8 January 2025 be approved as a true record of the proceedings and be signed by the Chair.

Members should notify the Chair of other business which they wish to be discussed at the end of either Part I or Part II business set out in the agenda. They must state the circumstances which they consider justify the business being considered as a matter of urgency.

The Chair will decide whether any item(s) raised will be considered.

There was no other business notified.

Audio recording – 3 minutes 8 seconds

There was no other business notified.

Members are reminded that any declarations of interest in respect of any business set out in the agenda, should be declared as either a Disclosable Pecuniary Interest or Declarable Interest and are required to notify the Chair of the nature of any interest declared at the commencement of the relevant item on the agenda.  Members declaring a Disclosable Pecuniary Interest must withdraw from the meeting for the duration of the item. Members declaring a Declarable Interest, wishing to exercise a ‘Councillor Speaking Right’, must declare this at the same time as the interest, move to the public area before speaking to the item and then must leave the room before the debate and vote.

(1)        The Chair advised that, in accordance with Council Policy, the meeting would be recorded.

(2)        The Chair drew attention to the item on the agenda front pages regarding Declarations of Interest and reminded Members that, in line with the Code of Conduct, any Declarations of Interest needed to be declared immediately prior to the item in question.

(3)        The Chair advised that section 4.8.23(a) of the Constitution did not apply to this meeting.

(4)        The Chair advised that the order of the agenda had been changed to that published, and the substantial items of business were to be considered in the following order:

i)      Agenda Item 9 – Annual Governance Statement 2023/24 and Action Plan 2024/25

ii)     Agenda Item 8 – Statement of Accounts 2023/24

iii)    Agenda Item 6 – SIAS Progress Report 2024-25

iv)    Agenda Item 7 – Budget 2025/26 (Revenue Budget and Investment Strategy)

Audio recording – 3 minutes 20 seconds

(1)       The Chair advised that, in accordance with Council Policy, the meeting would be recorded.

(2)       The Chair drew attention to the item on the agenda front pages regarding Declarations of Interest and reminded Members that, in line with the Code of Conduct, any Declarations of Interest needed to be declared immediately prior to the item in question.

(3)       The Chair advised that section 4.8.23(a) of the Constitution did not apply to this meeting.

(4)       The Chair advised that the order of the agenda had been changed to that published, and the substantial items of business were to be considered in the following order:

i)              Agenda Item 9 – Annual Governance Statement 2023/24 and Action Plan 2024/25.

ii)             Agenda Item 8 – Statement of Accounts 2023/24.

iii)           Agenda Item 6 – SIAS Progress Report 2024-25.

iv)           Agenda Item 7 – Budget 2025/26 (Revenue Budget and Investment Strategy)

To receive petitions, comments and questions from the public.

There was no public participation at this meeting.

Audio recording – 4 minutes 21 seconds

There was no public participation at this meeting.

THE REPORT OF THE POLICY AND COMMUNITIES MANAGER

For the Finance, Audit & Risk Committee to approve the Annual Governance Statement (AGS) for the year 2023/24. The Statement reviews the Council’s governance arrangements for the 2023/24 period. The report also presents an update on the action plan which seeks to improve governance arrangements during the 2024/25 financial year.

RESOLVED: That the Committee:

(1)   Approves the amended Annual Governance Statement and Action plan at Appendix A.

(2)   Notes the current position of the actions within the Annual Governance Statement Action Plan, outlined at Appendix B.

REASON FOR DECISION:

(1)   The Annual Governance Statement (AGS) must be considered and approved by the Finance Audit and Risk (FAR) Committee before the approval of the Statement of Accounts under Regulation 6(4)(a) of the Accounts and Audit Regulations (‘AAR’) 2015/234.

(2)   The FAR Committee is the legal body with responsibility for approval of the AGS.

(3)   Reviewing the AGS Action Plan during 2024-25 will provide the Committee with assurances that the Council is examining and where necessary improving its governance arrangements.

Audio recording – 4 minutes 31 seconds

The Policy and Strategy Team Leader presented the report entitled ‘Annual Governance Statement 2023/24 and Action Plan For 2024/25’:

·       The final version of the Annual Governance Statement for 23/24 was presented in 2025 due to the local audit back log.

·       The report was made available to SIAS, SAFS and KPMG, in June in 2024 to give them chance to comment. 

·       A draft was also presented to this Committee in June 2024 from which Principle E was reworded as it was thought it went into unnecessary detail . The Chair also asked for further detail on the ICO case, which was subsequently provided via email.

·       The assessment of governance arrangements was made using the CIPFA/SOLACE framework, which includes seven principles, and no significant issues were identified in the review.

·       The action plan provided actions to improve governance.

·       Actions were monitoring and improving the induction programme, office uptake of essential training on the Fraud prevention module (which was less than 75%), cyber prevention, the budget hub, the corporate peer challenge, social value and reviewing organisational structure.

Councillor Ruth Brown proposed and Councillor Tina Bhartwas seconded and, following a vote, it was:

RESOLVED: That the Committee:

(1)   Approved the amended Annual Governance Statement and Action plan at Appendix A.

(2)   Noted the current position of the actions within the Annual Governance Statement Action Plan, outlined at Appendix B.

REASON FOR DECISION:

(1)   The Annual Governance Statement (AGS) must be considered and approved by the Finance Audit and Risk (FAR) Committee before the approval of the Statement of Accounts under Regulation 6(4)(a) of the Accounts and Audit Regulations (‘AAR’) 2015/234.

(2)   The FAR Committee is the legal body with responsibility for approval of the AGS.

(3)   Reviewing the AGS Action Plan during 2024-25 will provide the Committee with assurances that the Council is examining and where necessary improving its governance arrangements.

REPORT OF THE SERVICE DIRETOR – RESOURCES

To consider the statement of accounts 2023/24.

RESOLVED: That the Committee:

(1)   Notes the KPMG Annual Report as attached at Appendix B and the KPMG Year End Report to the Finance, Audit and Risk Committee at Appendix C.

(2)   Approves the 2023/24 Statement of Accounts as attached at Appendix A (with the Auditors Report to be added), and that they can be signed by the Chair.

(3)   Approves the signing of a Management Representation by the Chair of the Committee. This will be a standard format and is in the process of being finalised by KPMG.

REASON FOR DECISION: To ensure that the Council abides by the Audit and Account Regulations 2015, which require the approval and publication of audited Statement of Accounts. Furthermore, to meet the back-stop deadlines set out in the Accounts and Audit (Amendment) Regulations 2024.

Audio recording – 11 minutes 2 seconds

The Engagement Director - KPMG presented the reports entitled ‘KPMG Annual Report’ and ‘KPMG Year End Report to the Finance, Audit and Risk Committee’(also known as ISA 260 report), attached as Appendices B and C to the ‘Statement of Accounts’ report and advised that:

·       The ISA 260 report, summaries the findings from the 2023/24 audit for the Council

·       KPMG would be issuing a disclaimed audit due to the previous year being a disclaimed opinion and the short time between the backstop dates for completing the 2022/23 audit and the 2023/24 audit.

·       Audit procedures were completed over elements of the Councils Income and expenditure, cash, payroll and  LGPS balances.

·       The ISA 260 document also highlights audit procedures in relation to the four significant risk areas.

·       KPMG’s disclaimed opinion includes these significant risk areas of valuation of land and buildings, valuation of investment property, and management override of controls. Full audit procedures have been completed over the significant risk in respect of the valuation of the LGPS.

·       Alongside the financial statement audit was the value for money audit, which had a positive opinion of no significant weaknesses.

·       KPMG were assisting on resetting the Local Government market and would aim for full audit procedures to be completed in the near future.

·       Recommendations and identified misstatements are highlight in the report, which were immaterial, and do not impact on the Council’s final reported position. 

The Service Director - Resources presented the report entitled ‘Statement of Accounts 2023/24’ and advised that:

·       The Council had elected not to correct the immaterial errors related to pension assumptions but would take action to try and ensure the errors did not occur for 2024/25 onwards.

·       The report from KPMG contains four recommendations. Receiving recommendations is different in form to Ernist & Young, this was a benefit as if gave the Council insight into potential room for improvement, these were all responded to.

·       Corrections the Council did make following the KPMG audit were in Appendix A highlighted in green.

·       Draft accounts were published online and advertised for public inspection and had no feedback. 

·       The Committee were asked to approve the signing of the KPMG management representation letter that would in a standard format.

The following Members asked questions:

·       Councillor Paul Ward

·       Councillor Ruth Brown

In response to questions, the Engagement Director - KPMG advised that:

·       The time to get out of the disclaimed opinion was not certain but KPMG would work with the PSSA and the Financial Reporting Council to reduce the number of sections with a disclaimed opinion in each annual report, this would give a bit more assurance each year until the disclaimed balances become immaterial, the aim for this was either the 2025/26 or the 2026/27 audits.

·       As part of the KPMG value for money audit risk assessment procedures, concerns were identified around staffing levels, vacancies and turnover, however with further investigation the mitigations the council had in place were satisfactory.

·       KPMG would require a written response from the Council, in  ...  view the full minutes text for item 59.

REPORT OF THE SHARED INTERNAL AUDIT SERVICE

To receive the Internal Audit Service progress report 2024-25 of the SIAS.

RESOLVED: That the Committee:

(1)   Notes the SIAS Progress Report for the period to 17 January 2025.

(2)   Notes the implementation status of the reported high priority recommendations.

(3)   Notes the plan amendments to the 2024/25 Annual Audit Plan.

Audio recording – 33 minutes 13 seconds

The SIAS Head of Assurance presented the report entitled ‘SIAS Progress Report 2024-25’ and highlighted the following:

·       Two changes were made since the publication of the Agenda, and these would be added to the progress report in March 2025.

·       Updates to the two high priority recommendations were found in appendix D.

·       Amendments to the Audit Plan approved at the start of 2024/25 were to defer the UK Shared Profits Fund Audit to 2025/26 and was replaced by an audit on performance indicators.

·       Three further draft reports were sent out on Friday, driving up the audits delivered so far figures up to 60% with each report equally approximately 5%.

·       Billable days had increased from 71% to 77%, increasing traction and meaning the plan was on track for delivery.

The following Members asked questions:

·       Councillor Paul Ward

·       Independent Member John Cannon

In response to questions, the Service Director – Resources advised that:

·       He would look in to whether the updated records on rent reviews would help the Council collect more income. Rent review record was a more of a control measure, which may help the Councils finances.

·       Rational for the rearranging the audits was around resources for supporting the UKSPF audit, but still making sure any learn lessons could be considered for allocations in 2025/26.

·       Peer challenge identified performance management and indicators as an area for improvement so timely to get support from SIAS to support looking at what the Council were currently doing and what could improve in more detail.

Councillor Paul Ward proposed and Councillor Tina Bhartwas seconded and, following a vote, it was:

RESOLVED: That the Committee:

(1)   Noted the SIAS Progress Report for the period to 17 January 2025.

(2)   Noted the implementation status of the reported high priority recommendations.

(3)   Noted the plan amendments to the 2024/25 Annual Audit Plan.

REPORT OF THE SERVICE DIRECTOR – RESOURCES

To consider the revenue budget and investment strategy for 2025/26.

RECOMMENDED TO CABINET: The Finance, Audit and Risk Committee commented on the budget process, assumptions and risks contained within the report, in the context that Cabinet recommend to Council that:

(1)   Notes the position on the Collection Fund and how it will be funded.

(2)   Notes the position relating to the General Fund balance and that due to the risks identified a minimum balance of £2.6 million is recommended.

(3)   Notes the net revenue savings that are likely to be required in future years, combined with the Chief Finance Officer’s section 25 report (Appendix D) which provides a commentary on the risks and reliability of estimates contained in the budget.

(4)   Approves the revenue savings and investments as detailed in Appendix B.

(5)   Approves the capital programme as detailed in Appendix C.

(6)   Approves a net expenditure budget of £22.792m, as detailed in Appendix E.

(7)   Approves a Council Tax increase of 2.99%, which is in line with the provisions in the Medium-Term Financial Strategy.

(8)   Approves the Investment Strategy as detailed in Appendix F.

(9)   Approve the adoption of the four clauses in relation to the Code of Practice on Treasury Management (as detailed in paragraphs 8.32 to 8.35).

REASON FOR DECISION:

(1)   To ensure that all relevant factors are considered in arriving at a budget (revenue and capital) and Council Tax level for 2025/26. To ensure that the budget is aligned to Council priorities for 2024-28 as set out in the Council Plan.

(2)   The Council’s Investment Strategy is set to comply with relevant statutory guidance, including the CIPFA Prudential Code. The Strategy also sets out the Council’s approach to risks in relation to the investment of surplus cash.

Audio recording – 41 minutes 20 seconds

N.B. Cllr Paul Ward declared an interest in this item due to his employment. He had spoken to the Monitoring Officer and had been advised that he could take part in the debate and vote on Recommendations 2.1 to 2.7 and 2.9, however needed to leave the Chamber and not take part in debate or vote on recommendation 2.8.

The Chair stated that recommendations 2.1-2.7 and 2.9 would be taken as one recommendation and 2.8 as a separate recommendation, and so to debate and vote would be separately.

The Service Director – Resources presented the report entitled ‘Budget 2025/26 (Revenue Budget and Investment Strategy) 2.1 – 2.7 & 2.9’ and highlighted the following:

·       The Government confirmed the funds for NI insurance employer payments, this fund was less than the total expenditure for the Council but was more than expected in the draft Budget.

·       At the last meeting of this Committee it was recommended that Cabinet and Council consider whether investments related to statutory services and the Implications of not going forward with them, this information had been added to the Cabinet report.

·       For the first time, the Budget report combed Capital, Revenue and Treasury, which was common in other Councils. This allowed the implications of capital funding to be more clearly seen.

·       The Report sets out that the Medium Term Financial Strategy (MTFS) was confirmed in September at Council and the Report adhered to that strategy.

·       Following the MTFS, Officers and Executive Members looked at where the Council could make savings and where the Council needs to make investments.

·       The next stage was the Budget Workshops with sessions for the administration and for Opposition groups.

·       There is a requirement to consult Business Ratepayers. This has been published to the North Herts Council website with e-mails to business groups to be sent on Thursday which would seek any feedback before the Council meeting.

·       The reasoning for some of the investments was set out in Section 8.1.

·       The changes since the draft and why these were featured in the budget was highlighted in Section 8.4

·       There is a requirement to consult Business Ratepayers. This has been published to the North Herts Council website with e-mails to business groups to be sent on Thursday which would seek any feedback before the Council meeting.

·       From 26/27 the Council will have a 3-year settlement.

·       In estimating future years budget the report took a middle case assumption.

·       The Report looked at the assumptions of the budget in Appendix D and a key part showed positive and negative predictions to what the Council could get as part of future funding. 

·       Table 3 looked at specific grants. Some concerns and opportunities in terms of the budget projections were, the UKSPF fund which gave scope in terms of investments in the District and the Healthy Hub Funding where there is uncertainty over the expectations of what needed to be delivered for this grant, and the Domestic Abuse Grant which was added to general  ...  view the full minutes text for item 61.

The Chair to lead a discussion regarding possible agenda items for future meetings.

The Chair led a discussion regarding possible agenda items for future meetings and no further items were suggested.

Audio recording – 1 hour 37 minutes 23 seconds

The Chair led a discussion regarding possible agenda items for future meetings and no further items were suggested.