Agenda and minutes

Governance, Audit and Scrutiny Committee
Thursday, 23rd November, 2017 6.30 pm

Venue: Council Chamber, Penns Place, Petersfield, GU31 4EX. View directions

Contact: Cynthia Haveron  Democratic Services Officer 01730 - 234092

Items
No. Item

69.

Apologies for Absence

To receive apologies for absence.

Minutes:

There were apologies for absence from Councillors M Johnson, Y Parker Smith and R Saunders.

70.

Chairman's Announcements

To receive any announcements the Chairman may wish yo make ofr information.

Minutes:

The Chairman:

 

·                     Welcomed Jason Jones, Manager at Ernst & Young LLP to the meeting, who had taken over from Emma Bryant;

 

·                     Informed the Committee that a meeting had been arranged between Cllr Evans and himself with Susan Parker, Head of Programmes, Redesign Quality and James MacKenzie, Corporate Programme Manager on Tuesday 28 November 2017 to discuss the Corporate Programme Office. This meeting followed the GAS Committee meeting held on 6 July 2017; and

 

·                     Explained that following training with Internal Audit two issues had been raised. The Committee should receive reports on the Councils investment and a regular performance dashboard in order that it could monitor the financial state of the Council. He had contacted Tom Horwood, Executive Director and Lydia Morrison, Head of Finance to ask for these reports to come to the Committee.

71.

Declarations of Interest

To receive and record any declarations of interest from members present in respect of any of the various matters on the agenda for the meeting.

Minutes:

There were no declarations of interest.

72.

Confirmation of Minutes

To approve the minutes of the previous meeting held on  5 September 2017 and the Extraordinary meeting held on 25 September 2017, previously circulated.

Minutes:

The minutes of the meeting held on 5 September 2017 and the Extraordinary meeting held on 25 September 2017 were agreed and signed as correct records.

73.

Annual Audit Letter 2016/17 pdf icon PDF 45 KB

The committee are asked to note the report.

 

For Information

Additional documents:

Minutes:

Andrew Brittain, Director and Jason Jones, Manager  Ernst & Young LLP presented the report.

 

He asked that it be noted that this was the Annual Audit Letter 2016/17 and not the Annual Audit Results Report as listed in the Agenda.

 

He explained that the letter informed Councillors of the key issues arising from 2016/17, the detailed findings of which had been discussed at the September Committee meeting.

 

He directed Councillors to the Executive Summary on Pages 6 and 7 of the agenda which showed an unqualified opinion. He confirmed that there were no matters that required reporting. He also confirmed that they were in the process of completing the Housing Benefits certification work by the end of November and would report back to the next meeting of the Committee.

 

Councillors reviewed the report.

 

Two typographical  errors were highlighted on Page 11 of the paper - Last bullet point change “thy” to “the ” and last paragraph amend “on you Whole..” to “on your Whole”.

 

Councillors referred to Page 16 of the report and the conclusions around the capacity of the Finance Team. The Committee was concerned about references including “minor errors” and “capacity officers were not able to respond as promptly as in the past”. It was explained that this was a minor concern and highlighted because of the extra pressure and 5 Councils work. This year there had been exceptional circumstances in resect of timescales for producing reports and would be repeated in the next year.

 

The Committee referred to the significant risks and conclusions on page 21 of the agenda in respect of working with Partners and Corporate Services Contracts. Reference had been made in the conclusions that that the Council did not have representatives with full voting rights on the governance committees and therefore relied on its relationship with Havant Borough Council to provide representation of its interests. The Chairman explained that he and the Vice-Chairman had been approached over a year ago about sitting on a Overview & Scrutiny Board but nothing had been agreed.

 

Tom Horwood explained to the Committee that the Council were not legally part of the contract due to the Hamburg Exemption. Some of the Council services were shared and these were IT, Transactional HR and Transactional Finance. These were only a small part of the contract. There was a responsibility to this Council to scrutinise and he saw no reason why the committee should not have access to them. He suggested a meeting between Gill Kneller, Executive Director, the Chairman and Vice-Chairman.

 

Mr Brittain in reply to a question on who monitored the property investment,  explained that this was not a External Audit function. In respect of Value for Money they would look at the arrangements in place and ensure the economy efficiency of the Council.

 

Concern was expressed about a comment on Page 22 of the agenda under Significant Risk – Working with Partners – Leisure contract. In the conclusion was the sentence “the value of the procurement was over the EU  ...  view the full minutes text for item 73.

74.

Internal Audit Progress Report 2017 - 18 (October 2017) pdf icon PDF 69 KB

The Committee are asked to note the Internal Audit Progress Report (October 2017) as attached.

 

For Decision

Additional documents:

Minutes:

Anthony Harvey and Amanda Chalmers, Southern Internal Audit Partnership presented the report.

 

The purpose of the report was to provide an overview of internal audit activity against assurance work completed in accordance with the approved audit plan and to provide an overview of the status of ‘live’ reports.

 

Anthony Harvey referred the Committee to page 42 of the agenda which set out a summary on the delivery plan and showed completed and finalised audits. He explained that many of the audits would not conclude until the end of the year.

 

He then referred the Committee to pages 45 – 48 of the agenda which showed the position on audit reviews currently being undertaken or proposed.

 

He confirmed that the extra work that would be necessary to look at the Six Councils Partnership and the transfer of services had been budgeted for and would be for an additional 60 audit days. This was only for the financial year 17/18.

 

He had no significant issues to bring to the attention of the Committee.

 

In reply to a question on why in his report there were references to 5 Councils and 6 Councils he explained that it should be the same, it was terminology.

 

Concern was expressed that no review had yet started on Commercial Activities, it was confirmed that this audit would take place in the final quarter and the information would be available in the March update.

 

It was confirmed that scoping meetings were attended by James Hassett, Executive Director Operations and Placing Shaping and the Head of Paid Service from EHDC and Amanda Chalmers and 2 auditors from Southern Internal Partnership.

 

There was concern about due diligence and investments that might run into difficulties, as it might be difficult to recover money quickly. In reply Mr Brittain explained that Investment strategy was not a audit function. It was also pointed out that property investment was a long term option and that you had to borrow to invest long term.

 

Members felt that investments by the Council should be monitored. Tom Horwood, Executive Director explained that the approach by management was to thoroughly review each property investment. He acknowledged that property investment was long term and that capital value fluctuated. The key was the liquidity of the tenant. Due diligence should be given on large properties and their tenants. There was an aspiration on yield and return . He agreed that the current market was not as good as it had been.

 

Mr Horwood agreed that the Committee should receive regular reports on property investments.

 

The committee agreed to the following action:

 

·                       An annual report on property investment be considered by the Committee.

 

Following a discussion, it was RESOLVED that the report be NOTED.

75.

Update on Appointment of External Auditor

The Committee will receive an update on the progress in appointing a External Auditor.

 

For Information

Minutes:

Councillor Williams updated the Committee on the Appointment of the External Auditor.

 

It had been a requirement that the Chairman of the Panel should be an Independent and Mr Shepherd had taken this role. Both independent members had a brought a wealth of experience from the procurement and recruitment side which he had found extremely helpful.

 

Following the procurement process with Capita, interviews with bidders had taken place earlier in the month and a report was being written with the Panel’s recommendation. This report would be considered by Council on 14 December 2017 for decision.

 

He explained that Cabinet had seen the draft report and fully supported the recommendation.

 

He confirmed that the contract would be for five years with the potential to extend for another two years.

 

RESOLVED that the update be NOTED.

 

76.

Monitoring Officer Update

To receive an update from the Monitoring officer on governance issues.

 

For Information

Minutes:

Nick Leach, Monitoring Officer briefed the Committee. Since the last update there had been one Code of Conduct complaint that warranted no further action.

 

He would be submitting a report to the next meeting on the Corporate Surveillance Policy.

 

RESOLVED that the update be NOTED.