Venue: New Council Chamber - Town Hall, Reigate
Contact: Democratic Services (01737 276182) Email: Democratic@reigate-banstead.gov.uk
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Minutes To confirm as a correct record the Minutes of the previous meeting. Supporting documents:
Minutes: The minutes from the meeting held on 10 July 2024 were APPROVED.
It was noted that in minute 16 it stated that a written response was required, however further detail was given at the meeting so therefore no written response was then required. |
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Apologies for Absence and Substitutions To receive any apologies for absence and notification of substitutes in accordance with the Constitution. Additional documents: Minutes: Apologies for absence had been received from Councillor Buttironi, Tommy Hyun (Independent Member) and Councillor King, Executive Member for Corporate Policy and Resources. |
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Declaration of Interest To receive any declarations of interest. Additional documents: Minutes: There were no declarations of interest. |
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Internal Audit 2024/25 – Progress Report That the Audit Committee notes the September 2024 internal audit progress report at Annex 1; and makes any comments and/or observations on the report to the Chief Finance Officer and Chief Internal Auditor. Supporting documents:
Minutes: Natalie Jerams, Chief Internal Auditor of Southern Internal Audit Partnership (SIAP) explained that this report provided an update on the delivery of the 2024/25 internal audit plan and update on live reports.
Page 26 of the agenda pack showed the percentage of work in progress, with the remaining audits that were underway. Since the reports had been finalised, it was now possible to say that 100% of the plan was in progress.
Page 27 gave an analysis of the live audit reviews. There were 3 medium priority and 1 low priority management actions overdue. These would be monitored through to completion. Pages 28 and 29 showed the status of the audits. In the July meeting, when the Committee received the annual report and opinion, it was noted that several 2023/24 reviews had not concluded. These had now concluded and related to cyber security, payroll and taxi licensing, three others remained in progress, one of which was now at draft report stage and Treasury Management which closed on the day of the meeting. SIAP was confident that they would be able to conclude the remained of last years audits very soon.
The Council had requested that the Non-Commercial Asset Management Review to defer to later in the year.
In terms of quarter 2 SIAP was able to report that all reviews had been scoped and were at fieldwork stage. One adjustment to the plan in Quarter 2 was that there was going to be a high-level review on Procurement and Contract Management which has been replaced with a wider assurance piece for Procurement in Q2 and Contract Management will be considered for later in the year.
Regarding the Procurement terms of reference, it was explained that this audit would look at compliance with the current procurement rules and whether RBBC was ready for the new changes that were coming in. It was questioned whether it would look at outcomes and value for money. The terms of reference would need to be looked at and an email response would be sent to members.
The outstanding management action on procurement shown on page 32 of the report related to the update in procurement rules which would conclude in September 2024, this deadline would be met.
In response to a member question relating to the HR leavers process (2023/24 review), it was stated that the report had been issued as a draft report and initial feedback had been received from officers at this stage. This would then be concluded and issued as a final report.
RESOLVED that the Audit Committee:
(i) Notes the September 2024 internal audit progress report at Annex 1; and (ii) Make any comments and/or observations on the report to the Chief Finance Officer and Chief Internal Auditor. |
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Internal Audit 2024/25 – Quarter 3 internal audit plan That the Audit Committee considers the proposed Internal Audit Plan for Quarter 3 2024/25, as set out at Annex 1, and makes any observations on the proposed plan and Authorises the Council’s Chief Finance Officer and Chief Internal Auditor to finalise the plan in consultation with the Chair of the Audit Committee. Supporting documents:
Minutes: Natalie Jerams, Chief Internal Auditor of Southern Internal Audit Partnership (SIAP) stated that the report referred to the quarter 3 plan for 2024/25. This was a risk-based plan which made reference to the current risk register. Pages 45 and 46 of the report referred to the internal audit plan for 2024-25 and each was linked to strategic risks. The horizon scanning was shown on page 48 of the report and this helped to inform future planning and this had changed slightly since quarter 2.
Income Collection was a follow up review after it had received a limited assurance outcome previously. This was to give reassurance.
The Money Support Service had been discussed with the Senior Management Team (SMT); this had not been audited before. Furthermore, the Cyber Security – Managed Service Platform was originally programmed in for the previous year.
SR4 – HR Organisational Capacity and Workforce Planning, this area had not been looked at previously.
It was questioned why the Merstham Recreation Ground Refurbishment had been selected and how this related to the internal audit of the capital programme. In response it was stated that the inclusion of this came about through discussions with SMT. It differed from the quarter 1 Capital Programme audit although there were aspects that could overlap. The main focus for the Merstham Recreation Ground review would be that wider project management aspect.
A further question was asked, if that review reported back with a limited or no assurance outcome would SIAP go back and review the Capital Programme piece of work? In response it was stated that the scopes were different although it would be a consideration if that arose.
In terms of the horizon scanning, climate change was featured but this looked more at mitigation. A starting point when scoping a review would be how it was described in the risk register.
RESOLVED that the Audit Committee:
(i) Considered the proposed Internal Audit Plan for Quarter 3 2024/25, as set out at Annex 1, and makes any observations on the proposed plan; and (ii) Authorised the Council’s Chief Finance Officer and Chief Internal Auditor to finalise the plan in consultation with the Chair of the Audit Committee. |
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Risk Management Quarter 1 2024/25 That the Audit Committee notes the Quarter 1 2024/25 update on risk management provided in the report and associated Annex 1 and Part 2 exempt Annex 2 and make any observations to the Executive. Supporting documents:
Minutes: The Head of Corporate Policy, Projects and Performance stated that risk management was part of the usual business of the Council and at an operational and management level took place on a day-to-day basis. The role of the Audit Committee when it came to Risk Management was to provide independent assurance over the adequacy of the risk management framework. This report provided members with an update on risk management in Quarter 1 (April to June 2024). Strategic risks were presented at Annex 1 of the report; red rated operational risks (exempt) were at Annex 2. In Quarter 1, no new strategic risks were identified. Following comments from the Audit Committee last quarter, the Executive agreed to keep Strategic Risk 11 (Fraud) open, pending the Audit Committee considering the Council’s counter fraud activity in more detail. An update on Counter Fraud Policies and Performance was also on the agenda for this meeting. As such, Committee member’s views on the scoring of this particular risk was welcomed. As well as reporting the strategic risk register to this Committee, updates were also provided on red rated operational risks. In Quarter 1 of 2024/25 there were two red rated operational risks. These were included in the Part 2 Exempt papers - Annex 2. As noted in the covering report, in Quarter 2, good progress had been made in respect of one of these red rated operational risks (OR12). Officers would be able to provide a verbal update about this at the meeting in Part 2. It was anticipated that this operational risk would be closed by the Corporate Governance Group in Quarter 2. At the last meeting a Committee member requested that consideration be given to include the Harlequin Theatre on the risk register as a result of the ongoing issues with RAAC concrete. This had been considered and the Corporate Governance Group had agreed to open an operational risk on RACC at the Harlequin Theatre and Cinema. The Committee agreed to consider the risk on fraud initially (SR11). It was noted that Reigate and Banstead Borough Council managed fraud on behalf of a number of other Surrey authorities. It was questioned whether fraud featured on these other council’s risk registers, this would need to be checked. The Committee was reminded that the Council dealt with a lot of risks on a day-to-day basis as business as usual. The consensus of the Committee was to recommend to Executive that this risk should remain a strategic risk currently. One advance question had been received regarding the issue of RAAC at the Harlequin Theatre. The Committee questioned whether this issue should be on the strategic risk register. The rationale behind this was that until the survey was completed and understood this was not operational but strategic. A member noted that East Lothian Council also had RAAC in their theatre and it was currently on their strategic risk register as the issue there had not yet been resolved. In response it was stated that when RAAC ... view the full minutes text for item 26. |
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Counter-Fraud Policies and Performance (i) That the Audit Committee notes the 2023/24 and 2024/25 Q1 counter fraud outcomes available at Annex 1; (ii) That the Audit Committee notes the counter fraud policies and resources in place; (iii) That the Audit Committee makes any comments and/or observations on the report to the Council’s Head of Revenues, Benefits and Fraud. Supporting documents:
Minutes: The Head of Revenues, Benefits & Fraud stated that the true value of fraud in local government was unknown, but it was huge, and most experts believed it was in the billions. An estimate in 2020 in a report by the Chartered Institute of Public Finance and Accountancy estimated that this figure could be as much as £8bn a year, in addition to fraud in central government, although it was also estimated to be as much as £20bn per year. Whatever the true cost, every pound that is lost due to fraud is a pound that cannot be spent on support to the community, which is at the heart of local government. The landscape was changing, fraudsters were becoming better and more confident in their attempts to commit fraud. During the pandemic the Council saw a flurry of grants and payments to businesses and individuals, and this confirmed that fraudsters, whether widespread or opportunistic, continued their attempts to obtain public money by deception. The report was to provide assurance to the Audit Committee that the Council took fraud seriously and had counter fraud policies and resources in place to identify fraud. The report provided an update on the performance of the team during 2023/24 in Annex 1, and for Quarter 1 in 2024/25, containing financial savings attributed to types of fraud prevented and detected. Financial loss was a key driver for this, whether in terms of money being lost directly or additional costs being incurred elsewhere. An example of this was the allocation of social housing to fraudsters which in turn drives up the cost of providing temporary accommodation for genuine applicants, because valuable social housing had been obtained by those who should not qualify for it. There was reputational damage if fraud was not addressed, and from our experience there was a negative impact on staff morale where they may feel that people approaching the council for help were not genuine, and if there were no resources in place to investigate. There was also the risk that without a robust counter fraud strategy in place or resources to investigate fraud, this would result in a low assurance rating by internal audit, and this in turn adversely affected staff morale and reputation. In response to a member question, it was explained that over the last 10 years there had been a lot of fraud around housing and they still saw that 9% of applications were fraudulent. There were a number of schemes in place, such as the Ukrainian settlement scheme and there had been fraud in connection with this. Fraud was seen as a constant and without measures in place it would be difficult to contain. Other schemes such a business grants during Covid and the test and trace schemes for example, checks were needed to root out fraud. In terms of write offs, it was stated that the Constitution allowed a certain amount of money that could be written off. The amounts that had been written off could be shared ... view the full minutes text for item 27. |
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Audit Work Programme 2024/25 and Action Tracker To discuss and agree any changes to the schedule for Audit Committee’s Work Programme 2024/25 and note the Action Tracker. Supporting documents:
Minutes: The Committee questioned whether there was an indicative date for the items on the work programme denoted as date to be confirmed. The Deputy Chief Finance Officer explained that the finance team had now received the external auditor’s draft report pertaining to financial year 2020/21, and a report regarding the arrangements to be put in place for the external audit ‘back stop’ position. The finance team are in the process of reviewing these reports and will provide responses to the reports for the external auditors to consider.
Once these reports have been finalised an additional meeting of the Committee would be arranged before December 2024 in order for the committee members to consider the reports.
The Deputy Chief Finance Officer agreed to set up a training session for members in relation to the audited statement of accounts before the additional Audit Committee.
RESOLVED that the Audit Committee’s work programme for 2024/25 and the action tracker be noted. |
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Any Other Urgent Business To consider any item(s) which, in the opinion of the Chair, should be considered as a matter of urgency – Local Government Act 1972, Section 100b (4)(b).
Note: Urgent business must be submitted in writing but may be supplemented by an oral report. Additional documents: Minutes: There was none. |
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Exempt Business RECOMMENDED that members of the Press and public be excluded from the meeting for part of item 6 of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:
7. Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime. Additional documents: Minutes: RESOLVED that members of the press and public be excluded from the meeting for part of agenda item 6 (Risk Management - Quarter 1 2024/25) under Section 100A(4) of the Local Government Act 1972 on the grounds that: It involves the likely disclosure of exempt information as defined in paragraph 7 of Part 1 of Schedule 12A of the Act.
7. Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime. |