Agenda and draft minutes

Audit & Governance Committee - Thursday, 18th July, 2024 6.30 pm

Venue: The Ceres Suite, Worksop Town Hall, S80 2AH. View directions

Contact: Simon Johnson 

Items
No. Item

1.

Apologies for absence

Minutes:

Apologies for absence were received from Councillors: D. Bamford, C. Entwistle and F. Merryweather.

 

Councillor N.J. Sanders attended as substitute Member.

 

Councillor J. Bowker was absent from the meeting.

2.

Declarations of Interest by Members and Officers

2a

Members

Minutes:

There were no Declarations of Interest by Members.

2b

Officers

Minutes:

There were no Declarations of Interest by Officers.

3.

Minutes of the meeting held on 06th February 2024 pdf icon PDF 124 KB

Minutes:

Resolved that:

 

The Minutes of the meeting held on 06th February 2024 be approved.

4.

Outstanding Minutes List pdf icon PDF 57 KB

Minutes:

Resolved that:

 

The Outstanding Minutes List be received.

5.

Part 5 Constitution - Rule of Procedure 13(c) - Change to Order of Business

Minutes:

After receipt of the Outstanding Minutes at Item 4 of the published agenda.

 

In accordance with Rule of Procedure 13(c) (Part 5 Constitution), the Chairman exercised discretion to change the order of business.

 

Item(s) to be moved forward (in the following order) for consideration and determination:

 

  1. Item 6(b) – Internal Audit Progress Reports 2023-24 and 2024-25
  2. Item 6(c) – Internal Audit Annual Report 2023-24
  3. Item 7(a) – Constitution & Supporting Documents Amendments
  4. Item 7(b) – Regulation of Investigatory Powers Act (RIPA) Review of use of RIPA powers and policy

 

Following determination of this Item, the order of business reverted to that in the published agenda, continuing with Item 5(a) – Annual Treasury Management Review 2023-24 (Key Decision No. 1038).

6.

Report(s) of the Director of Corporate Resources

6a

Internal Audit Progress Report 2023-24 and 2024-25 pdf icon PDF 133 KB

Additional documents:

Minutes:

Members with an update report on progress made against the Internal Audit plans for 2023/24 and 2024/25 and a summary of the results of our work to date.

           

Since the Audit & Governance Committee last met, seven reports have been finalised and as follows:

  • Disabled Facilities Grant and Adaptations – SUBSTANTIAL assurance.
  • Risk Management Deep Dive – REASONABLE assurance.
  • Treasury Management – REASONABLE assurance.
  • Allotments – REASONABLE assurance.
  • Follow Up 4 – Little progress.
  • Follow Up of IT Incident Management and IT Security – no opinion (advisory audit).

·         Continuous Assurance Visit 3 – no opinion.

 

Options, Risks and Reasons for Management Actions

 

The management actions are contained within each individual report. Officers and management have the option to not agree with the management action; however, this must be because of a valid operational and practical reason. The risks can be varied and therefore it is important that weaknesses are addressed as soon as practically possible.

 

Resolved that:

 

Members received the Internal Audit Progress Report and noted actions taken or to be taken

6b

Internal Audit Annual Report 2023-24 pdf icon PDF 101 KB

Additional documents:

Minutes:

Members received the Internal Audit Annual Report, informing on the activities of Internal Audit during the financial year 2023/24, that includes amongst other matters, an opinion on the overall adequacy and effectiveness of the Council’s internal control environment.

 

The role of Internal Audit is to provide management, with an objective assessment of the adequacy and effectiveness of risk management, governance and internal control arrangements.

 

Options, Risks and Reasons for Recommendations

 

Best Practice, as outlined in the Code of Practice recommends that a formal Annual Report should be presented to the Audit and Risk Scrutiny Committee of the Council. In the past the External Auditors have requested this report as part of their assessment of the performance of Internal Audit and the contribution it makes to the Annual Governance Statement.

 

Resolved that:

 

Members received and accepted the Internal Audit Annual Report as presented.

7.

Report(s) of the Monitoring Officer

7a

Constitution & Supporting Documents Amendments pdf icon PDF 99 KB

Additional documents:

Minutes:

Members received a report, seeking approval for amendments to the Councils Constitution and supporting documents.

 

In consideration of this item, the Audit & Governance Committee made recommendation to the Licensing Committee (in regard to items considered by the Licensing Sub-Committee), that should Members (of said Sub-Committee) be minded for further considered determination of issues presented before it, be able to refer said issue to the full Licensing Committee for determination.

 

Options, Risks and reasons for recommendations

 

If the Council does not have adequate governance processes in place to ensure that it complies with all relevant legislation, it could result in a breach in governance requirements leading to (depending on the seriousness of the breach) fines, reputational damage, government intervention alongside failure to deliver organisational priorities.

 

Having an effective Constitution serves to make clear the procedures the Council follows in conducting its business and minimises the risk of decisions being taken outside of the agreed framework.

 

Resolved that:

           

1.    Members approved the proposed amendments to the constitution and supporting documents and referred the changes to the next meeting of Full Council for review prior to implementation; excluding (Appendix D of the report) Part 6 – Member/Officer Relations, which is withheld for further consideration/consultation.

2.    The Audit & Governance Committee made recommendation to the Licensing Committee (in regard to items considered by the Licensing Sub-Committee), that should Members (of said Sub-Committee) be minded for further considered determination of issues presented before it, be able to refer said issue to the full Licensing Committee for determination.

7b

Regulation of Investigatory Powers Act (RIPA) Review of use of RIPA powers and policy pdf icon PDF 100 KB

Additional documents:

Minutes:

Members received an update report on the Councils current use of powers under Regulation of Investigatory Powers Act 2000 (RIPA); proposed amendments/updates to RIPA; highlight a potential change required to the Policy (in relation to communications data) and make changes to the RIPA Policy to reflect the current Officer structure/job titles.

 

Options, Risks and reasons for recommendations

 

It is important that the Council continues to operate in accordance with RIPA to ensure that it is able to effectively manage its reputational risk whilst also exercising its legitimate evidence gathering powers in connection with enforcement activity.

 

The policy also requires the Senior Responsible Officer to prepare an annual report, which will state the number of authorisations granted and a brief outline of the reasons for the authorisations.

 

Resolved that:

 

1.    Members received the contents of the report and noted the number of authorisations granted in 2023/24.

2.    Members approved the proposed amendments to the Council’s RIPA policy and referred the policy to the next meeting of Full Council.

8.

Report(s) of the Director of Corporate Resources

8a

Annual Treasury Management Review 2023-24 (Key Decision No. 1065) pdf icon PDF 103 KB

Additional documents:

Minutes:

Members received the Annual Report on Treasury Management Activity for 2023/24 (including Prudential and Treasury Management Indicators) which demonstrates how this (activity) is consistent with the Treasury Management Strategy approved by Full Council on 02nd March 2023.

 

This report must be presented to Council each year, in accordance with the Prudential Framework, which incorporates the following statutory guidance:

·         CIPFA Prudential Code

·         CIPFA Treasury Management Code

·         DLUHC Guidance on Investments

·         DLUHC Guidance on the Minimum Revenue Provision

 

Options, Risks and Reasons for Recommendations

 

There are no options for Members to consider at this stage since past performance is being reported. Treasury Management is an important Council function since it deals with large value money transactions. The potential risk in this area is very high, however the Council has in place sound systems of financial control to minimise these risks. These controls are updated on an annual basis and monitored throughout, in order to provide the assurance that risk is being minimised. Additionally, by monitoring the Prudential Indicators this serves to minimise the risk in this area.

 

Resolved that:

 

1.    Members received the Annual Report on Treasury Management Activity for 2023/24 and comments as appropriate for referral onto Cabinet and Council.

2.    Members noted that the Treasury Management activities are consistent with the objectives identified in the Treasury Management Strategy for 2023/24.

8b

External Audit - Auditor's Annual Report 2021-22 pdf icon PDF 99 KB

Additional documents:

Minutes:

Members received the (External) Auditor’s Annual report for 2021/22; the Auditor’s Annual Report (AAR) summarises the work undertaken by Forvis Mazars, as auditor for Bassetlaw District Council, for the year ended 31st March 2022.

 

Options, Risks and Reasons for Management Actions

 

There are no options for Members to consider at this stage. The report is presented to members for noting.

 

Resolved that:

 

1.    Members received the Auditor’s Annual Report for 2021/22.

2.    Members noted that the fees shown under section 4 of the AAR have been agreed by the Council’s Director of Corporate Resources.

8c

Backstop Dates, Changes to the Financial Statements, Accounting Policies and Regulatory Changes for 2023-24 pdf icon PDF 108 KB

Additional documents:

Minutes:

Members received a report informing on the proposed backstop arrangements for outstanding audits of accounts and the timeline for the preparation and audit of the 2023/24 Statement of Accounts; seeking approval of the accounting policies, to be used as the basis on which the accounts will be prepared, for the financial year ending 31st March 2024.

 

Options, Risks and Reasons for Recommendations

 

The report is provided to Members for information and consideration.

 

Whilst not ideal there is a risk that the Council may receive a disclaimed audit opinion for 2022/23 and potentially qualified accounts for a number of years thereafter, there is little it can do in practice. A number of other local authorities are also in the same position as Bassetlaw. There is a greater risk in attempting to achieve an ambitious timeline and failing, while at the same time jeopardising publication of draft 2023/24 Statement of Accounts and the implementation of the new IFRS16 accounting standard from 1st April 2024.

 

Resolved that:

 

1.    Members approved the 2023/24 accounting policies as detailed in Appendix 1 of the report. 

2.    Members noted the timeline for the preparation and audit of the 2023/24 Statement of Accounts.

3.    Members noted the proposed backstop arrangements for outstanding audits of accounts.

8d

Draft Annual Governance Statement 2023-24 pdf icon PDF 106 KB

Additional documents:

Minutes:

Members received the draft Annual Governance Statement (AGS), summarising the Council’s governance arrangements for the financial year ending 31st March 2024.

 

Local authorities are required to prepare an AGS, in order to report publicly on the extent to which they comply with their own code of governance, which is consistent with good governance principles.

 

Options, Risks and Reasons for Recommendations

 

The Council’s statutory responsibility to fully comply with the Accounts and Audit Regulations 2015 will not be met unless it approves an AGS in advance of approval of the Council’s Statement of Accounts.

 

Non-compliance with the Accounts and Audit Regulations 2015 and proper financial practices could affect the external auditors’ opinion on the Council’s Statement of Accounts.

 

Non-compliance with the Accounts and Audit Regulations 2015 would need to be formally reported which could adversely affect the Council’s reputation for having robust and effective governance arrangements.

           

Therefore, the options available are that the draft Annual Governance Statement is approved, or agree amendments to it, which will ensure compliance with statutory, legal and financial practices.       

 

Resolved that:

 

1.    Members approved the Annual Governance Statement for 2023/24 as shown at Appendix 1 of the report.

2.    The Audit & Governance Committee request that the Director of Corporate Resources presents the Annual Governance Statement (2023/24), attached at Appendix 1, to the Chair of Audit & Governance Committee and the Chief Executive for their signatures and subsequent inclusion in the Statement of Accounts for 2023/24.

8e

Assessment of Going Concern pdf icon PDF 583 KB

Minutes:

Members received a report sets outlining the Council’s assessment (by the Council’s Section 151 Officer) of the Council’s Going Concern status in respect of the 2023/24 Statement of Accounts.

 

The concept of a ‘going concern’assumes that an authority, its functions and services will continue in operational existence for the foreseeable future.

 

Options, Risks and Reasons for Recommendations

 

It is considered that having regard to the Council’s arrangements and such factors as highlighted in the report that the Council remains a ‘going concern’ and the Council’s accounts for 2023/24 are, appropriately prepared on this basis.  This report gives that assessment by the Council’s Section 151 Officer in support of presenting accounts for approval and provides assurance to Mazars, the Council’s external auditor.

 

Resolved that:

           

Members noted and support the assessment and basis on which the assessment has been derived.

8f

Waivers from Contract Procedure Rules 2023-24 pdf icon PDF 136 KB

Minutes:

Members received an update report on waivers from Contract Procedure Rules (CPR); waivers from procurement rules are permitted under Sections 18 and 19 (CPR18 and CPR19) of the Council’s Contract Procedure Rules.

 

Options, Risks and Reasons for Recommendations

 

Risks are evaluated when individual waiver approval is sought. Waivers would not be approved if they presented unacceptable risk.

 

Resolved that:

           

1.    Members noted and supported the actions outlined in the report.

2.    The Audit & Governance Committee requests a further report be provided, for the six-month period to the end of September 2024.

8g

Corporate Risk Management Quarter 4 2023-24 pdf icon PDF 142 KB

Minutes:

Members received an update report on the current level of assurance that can be provided against each of the identified corporate risks; the updated Risk Management Strategy & Framework was considered and approved by the Audit & Governance Committee on 16th November 2023.

 

The purpose of the Strategy and Framework is to define how risks are managed by the Council. It provides guidance on the processes, procedures, roles and responsibilities for risk, and it sets out the context on how risks are to be managed.

 

The Corporate Risk Register is a key enabler of the Strategy and Framework and provides assurance on the key risks identified as Corporate Risks. Existing risks identified within both the Council’s corporate and operational service risk registers are subject to quarterly review by senior management and on an on-going basis through the work Audit & Governance Committee 4 of Internal Audit.

 

The Corporate Risk Register and supporting comments as at the end of quarter three (March 2024) are provided with a summary of all the control gaps currently identified.

 

Options, Risks and Reasons for Recommendations

 

The report is provided to Members for information and consideration. Members may wish the Corporate Risk Management Group to consider other perceived risks as deemed appropriate.

 

Resolved that:

           

Members noted the progress of actions identified within the Corporate Risk Register.

9.

Any other business which the Chairman considers to be urgent

Minutes:

Prior to the meeting, Members attended a refresher training session (delivered by the Director of Corporate Resources) in Audit & Governance; further training in Treasury Management is due to be delivered to Members prior to the scheduled November meeting.

 

As there was no other urgent business, the Chairman closed the meeting.