Agenda and minutes

Apologies for absence were received on behalf of Councillors Ashley, Lovell and Marshall.

To invite Councillors to declare any Disclosable Pecuniary Interests and/or Other Disclosable Interests they may have in items on the agenda, and to confirm the nature of those interests.

There were no declarations of interest nor of party whip.

The minutes of the meeting of the Audit, Governance and Standards Committee held on 21^st September 2023 will be considered at this meeting.

Members of the public have an opportunity to speak at meetings of the Audit, Governance and Standards Committee.  In order to do so members of the public must register by 12 noon on Tuesday 21^st November 2023.  A maximum of 15 minutes will be allocated to public speaking.

There were no registered public speakers on this occasion.

The Principal Solicitor introduced the Monitoring Officer’s report and in doing so reported that two Member complaints had been received since the last meeting. One complaint had been resolved with Group Leaders locally and the other complaint would be reported on in more detail at the next Audit Committee meeting.

In response to a question, the Principal Solicitor confirmed that the Council kept a record of all formal complaints. It was also clarified that with respect to scheduled Members’ social media training, this concerned the general guidance and issues surrounding elected members’ use of social media, rather than covering information relating to any specific complaints.

RESOLVED that

the Monitoring Officer’s report be noted.

To receive a report from the Feckenham Parish Council Representative on the Parish Council’s Standards matters. (Oral report)

It was noted that representatives from Feckenham Parish Council were not present to provide an update.

During discussion, Members commented that they felt updates on the Parish Council standards matters had been informative and useful to the Committee. It was requested as an action that a letter be written to Feckenham Parish Council, reaffirming that their continued representation on the Audit, Governance and Standards Committee was valued and asking their representatives to provide standards updates at every meeting, if possible.

(Report to follow)

This report will be published in the Additional Papers Pack for this meeting.

The Key Audit Partner for Grant Thornton presented the Joint Interim Auditor’s Annual Report for years 2021-22 and 2022-23 and in doing so noted that the Report covered arrangements for the period from 1^st April 2021 to 31^st March 2023. It was noted that the final auditor’s annual report for 2021-22 and 2022-23 could not be issued until the final sets of Accounts for these years had been submitted and audited.

It was noted that the Joint Interim Auditor’s Annual Report followed from the Section 24 Report considered by the Audit, Governance and Standards Committee on 10^th November 2022. Last year’s Section 24 Report set out the Statutory Recommendation issued by the External Auditor under Section 24 of the Local Audit and Accountability Act 2014. It was highlighted that the Report before Members updated on the progress against Statutory, Key and Improvement Recommendations that were issued on 31^st October 2022 and the Report also reaffirmed that the Statutory Recommendation remains outstanding.

The Key Audit Partner explained that the Statutory Recommendation was issued on 31^st October 2022 as a result of the non-delivery of the 2020-21 financial statements at that time. As of 23^rd November 2023, the Council’s remained unable to publish the draft 2020-21 Accounts, and this was the reason for the External Auditor’s updated Section 24 Statutory Recommendation. The Key Audit Partner explained that some improvement had been made in addressing the Statutory Recommendation, in particular around the functioning of the Enterprise Resources Planning (ERP) system, TechnologyOne, and the successful remediation of the cash receipting module within that system. The Council had also provided data take on balances for periods 1-11 of the 2020-21 financial year.

The Key Audit Partner clarified that the External Auditor had now received period 0 data take on balances on 13^th November 2023. However, the priority remained for the External Auditor to gain assurance around period 0 balances and the data transfer that took place between the Council’s old ledger system, eFinancials, and the new ledger system, TechnologyOne.

It was highlighted that, as reported in the previous meeting, the Department for Levelling Up, Housing and Communities (DLUHC) had announced a range of proposals to address the backlog of audits across English local authorities. These proposals included enforcing statutory deadlines for local authorities to complete outstanding audits that, if not met, would lead to an automatic issuing of qualifications and disclaimers of opinion for those sets of accounts and the auditors being asked to move on to the statements of accounts for subsequent years. The Key Audit Partner noted that whilst these proposals still required legislation to be passed in order to come into effect, it was likely that backstop dates would lead to at least one of Redditch Borough Council’s outstanding sets of financial statements (i.e. for 2020-21, 2021-22 and 2022-23 financial years) being qualified.

The Key Audit Partner addressed the progress made by the Council against the 6 key recommendations that were issued  ...  view the full minutes text for item 47.

The Interim Director of Finance presented the Quarterly Risk Update and in doing so noted that this was the fifth cycle of reviewing corporate and departmental risks since the original baselining of risks in April 2022. It was noted that risk was managed centrally through the 4Risk System and the organisational risk level had moved to a moderate assurance level since May 2023.

It was noted that there were 12 Corporate Risks and Members were advised that mitigating factors were in place for each of the Corporate Risks as detailed in the report. With reference to the cyber security risk, it was stressed that it remained red despite all the mitigations in place, including the renewal of cyber security insurance for another year, due to the importance and scale of risks in this area. With regard to the cost of living crisis risk, it was noted that there had been a significant increase in insurance claims due to fires in the Borough.

There were 51 Departmental Risks of which 1 was a red risk related to Revenues - Performance Indicator data that was not deemed robust as it could not be system generated. This compared with the original baseline in April 2022 of 119 risks.

Following the presentation of the report, Members raised questions and made comments regarding a number of risks or potential risks as follows:

·       Terrorism Protection (potential Corporate Risk) – It was clarified that government guidance was scheduled to be published soon in relation to terrorism protection, there were no further information at this point. It was noted that depending on the guidance there could be a significant risk and cost associated with this for the Council.

·       Cyber security (Corporate Risk) – Members were informed that local authorities were one of the most targeted institutions, and that due to importance of this risk in underpinning all Council processes it remained red on the corporate risk register. It was noted that Redditch and Bromsgrove Councils had been rated reasonably highly, at 4 out of 5, on cyber preparedness by IT security experts at this year’s LGA conference.

·       Contract Arrangement for dog control / kennelling (Worcestershire Regulatory Services risk) – It was noted that this issue and trends on this had been discussed at the last meeting of Worcestershire Regulatory Services Board. Members were referred to the minutes of that meeting, which took place on 16^th November 2023, for more detail on this risk. The minutes were available to access from Bromsgrove Council’s committee management website.

RESOLVED that

the present list of Corporate and Departmental Risks be noted.

The Internal Audit Team Leader provided the Internal Audit Progress Report for Members’ consideration. It was noted that several pressures had affected the Worcestershire Internal Audit Shared Service (WIASS), including long-term sicknesses and the loss of key personnel. Due to this, the report asked for approval to revisions to the 2023-24 Internal Audit Plan, in particular deferral of audits if it was prudent to do so from a risk assurance perspective. The audits chosen for deferral to 2024-25 financial year were the Council Tax, National Non-Domestic Rates, Benefits and Rubicon audits.

A question was asked with respect of the deliverability of the planned days for the 2023-24 internal audit of the Council. It was noted that it was asked as per revisions to the internal audit plan that productive days for 2023-24 be reduced by 26 days from 364 to 328. However, the allocation of days as revised remained on track for delivery within 2023-24.

RESOLVED that

Revisions to the 2023-24 Annual Internal Audit Plan are approved.

The Head of Finance and Customer Services presented the Financial Compliance Report and in doing so noted that this report was part of the Financial Recovery Programme agreed by the Executive Committee in September 2022. Several issues were highlighted for Members’ consideration.

It was highlighted that training had been taking place with staff to increase financial awareness and use of the Council’s enterprise resource planning system. A mandatory budget manager training (which included the use of the TechnologyOne system) took place in September 2023 – through this training budget managers were upskilled to input their budget forecasts directly into the system, rather than on spreadsheets. Further mandatory financial awareness training for managers took place in August and September 2023.

It was reported that the current Head of Finance and Customer Services would be leaving the organisation. The Council had begun recruitment for a permanent replacement for this position. The Council had also needed to recruit a new Finance Manager to accommodate the current Finance Manager moving to cover the post of Head of Finance and Customer Services on a temporary basis.

It was noted that work was ongoing on the clearance of the Cash Receipting suspense accounts. As reported to this Committee, the Council were working to clear the backlog by the end of this calendar year. Present progress indicated that there would be a small, non-material balances still to clear at the 31^st December but the overall position would mean that the 2021/22 and 2022/23 accounts closure processes could be run.

Following the presentation, a question was asked with regard to inclusion in the report of detail on waivers granted by the Council in its contracts. Officers responded that the next quarterly financial monitoring report would include information on waivers as an appendix.

RESOLVED that

the progress on the 2020-21 Audit process be noted.

As the Council’s Risk Champion, Councillor Marshall, had submitted her apologies, there was no risk champion update.

It was reported that the Council’s new external auditors, Bishop Fleming, would be in attendance at the next meeting for introductions.

It was also reported that the Committee would also need to consider the issue of independent members’ appointment as per the recommendation of the Joint Auditor’s Annual Report. However, this issue would first need to be discussed by the Constitutional Review Working Party before being considered by this Committee.

RESOLVED that

the contents of the Committee’s Work Programme be noted.