Agenda and draft minutes

Audit Committee - Wednesday, 6th December, 2023 7.30 pm

Venue: New Council Chamber - Town Hall, Reigate. View directions

Contact: Democratic Services (01737 276182)  Email: Democratic@reigate-banstead.gov.uk

Media

Items
No. Item

29.

Minutes

To confirm as a correct record the Minutes of the previous meeting.

Supporting documents:

Minutes:

The minutes from the meeting held on 6 September 2023 were APPROVED.

30.

Apologies for Absence and Substitutions

To receive any apologies for absence and notification of substitutes in accordance with the Constitution.

Additional documents:

Minutes:

An apology for absence was received from Councillor Bray, Councillor Harrison attended as her substitute.

31.

Declaration of Interest

To receive any declarations of interest.

Additional documents:

Minutes:

There were none.

32.

Risk management - Quarter 2 2023/24

To note the Quarter 2 2023/24 update on risk management provided in the report and make any observations to the Executive.

Supporting documents:

Minutes:

Councillor J King, Executive Member for Corporate Policy and Resources, provided a short update from his portfolio for Committee members highlighting some developments relevant to the strategic risks which have taken place since the end of Q2:

SR1 – financial sustainability. Relevant to this risk was the draft 2024/25 budget, recently endorsed by the Executive, and currently undergoing consultation and review by the Overview and Scrutiny’s Budget Scrutiny Panel.

The draft budget for 2024/25 anticipated a balanced budget with a call on reserves for specific funding risks faced by the Council.

SR6 – Local Government reorganisation, devolution and Levelling Up. In his Autumn Statement, the Chancellor announced that Surrey County Council had been invited by the government to discuss a Level 2 devolution deal.

The deal did not require any structural changes to Local Government in Surrey, but provided the opportunity for Surrey County Council to take on additional areas of responsibility (with associated funding).

The Council would work with Surrey to help to shape the devolution deal.

SR9 – Gatwick Airport. The Council has now submitted its representation to the Planning Inspectorate setting out its views on the proposal to bring the Airport’s emergency runway into regular use.  This response has recently been shared with all members.

The Head of Corporate Policy, Projects and Performance introduced the report and provided members with an update on risk management in Quarter 2 2023/24.

In quarter 2, no new strategic risks had been identified and no strategic risks were recommended for closure.

Operational Risks - As well as receiving an update on strategic risks, the Council provided the Committee with updates on RED rated operational risks.

At the end of quarter 2 there was one RED rated operational risk. Additional detail on this risk was provided in the part 2 exempt annex.

Following the Audit Committee meeting, this report would be considered by the Executive on 14 December.

Due to the timing of when the Executive meeting agenda was published, any observations made by the Audit Committee on the report’s contents would be raised at the meeting of the Executive on 14 December.

In response to a member question regarding SR1, Financial Sustainability, it was explained that despite the Council currently forecasting a balanced budget for 2024/25 it was prudent that this remained red rated until the Council knew the final settlement in December. Officers would reconsider this RAG rating ahead of the next meeting.

 

The Committee felt that SR1 and SR2 were interlinked, and that financial sustainability was a longer-term factor, rather than just one year’s budget and noted that there remain concerns looking further ahead. Some of the controls in SR1 related to the Council’s commercial strategy. The Council was receiving positive financial returns on The Rise however it was now giving a lower priority to pursuit of its commercial strategy. Due to commercial failings in a number of councils there had been changes to the codes of practice relating to investments that are limiting the scope of new commercial  ...  view the full minutes text for item 32.

33.

Internal audit - Quarter 2 2023/24 progress report

i)             That the Audit Committee note the Q2 2023/24 internal audit progress report available at Annex1; and

ii)            Thatthe AuditCommittee makeany commentsand/or observationson the report to the Council’s Chief FinanceOfficer.

 

Supporting documents:

Minutes:

Natalie Jerams, Chief Internal Auditor of Southern Internal Audit Partnership (SIAP), explained that page 48 of the report showed the list of live audits with the final three columns showing the number of overdue management actions.

 

All audits from Q1-Q3 were underway with a number due to come to completion. The remaining Q4 audits would begin in January 2024.

 

Page 52 of the report showed adjustments to the audit plan, these alterations would not impact the internal audit report and opinion.

 

A member of the Committee explained that he was concerned about contract management being deferred, it was felt that this was a significant piece of work that needed to be undertaken.

 

In terms of the performance dashboard on page 47 of the report, it was explained that having completed 19% of audits was lower than normal for this point in the year, however 50% were in progress and there was real breadth in this 50%. The Committee was assured there would be 100% delivery and that the annual report would be achieved.

 

In terms of the audit relating to the use of volunteers it was stated that the actions due on 30 November were complete. There had been 15 management actions that had come out of this audit, 1 of which was to prioritise enhanced DBS checks. Information had now been gathered and mitigations were in place. Processes had been put in place to ensure that the Council stayed on track moving forward regarding DBS checks. It was noted that those audits with limited assurance would appear in next year’s audit programme to provide further assurance.

 

A Councillor commented that in terms of overdue actions, it would be helpful to have column added to demonstrate what had changed since the previous Committee.

 

In respect of low and medium priorities it was stated that these still required addressing. It was noted that some of these were overdue by 2 years, including fleet management, procurement and information governance.

 

In response to a question, it was explained that, following internal changes, the Procurement function had moved into the Finance department. There was now a Procurement Board in place with an improvement plan overseen by the Board. The Council had also employed a procurement consultant to ensure that improvements were delivered. The Strategic Head of Organisation and Transformation gave an overview of the activities that had taken place over recent months.

 

It was explained that the previous internal audit reviews of procurement and contract management had taken place in 2021. The outcome was to conclude that the Procurement service required a complete redesign in order to address significant gaps.

 

While individual tendering exercises had continued to take place and were compliant with established processes the lack of strategic oversight meant that the service as a whole was not yet operating effectively to secure value for money across the board. It was anticipated that a new operating model would be fully embedded by April 2024, including recruitment of permanent staff.  The Council was also  ...  view the full minutes text for item 33.

34.

Review of the Code of Corporate Governance

To note the Code of Corporate Governance at Annex 1.

Supporting documents:

Minutes:

The Electoral and Democratic Services Manager and Deputy Monitoring Officer introduced the report, stating that each local authority was required to develop and maintain a Code of Corporate Governance.

 

The Code of Corporate Governance sets out the principles of good governance and the arrangements in place to ensure that the Council conducts its business in accordance with the law and proper standards.

 

It provided assurance that the Council was meeting best practice in protecting its assets and serving the community.

 

The Code of Corporate Governance has been drafted in accordance with the principles set out in the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) guidance entitled ‘Delivering Good Governance in Local Government’.

 

The guidance defines seven core principles that should underpin the governance framework of a local authority, and the Code demonstrates how the Council meets those principles by referring to relevant policies, strategies and governance framework documents. The guidance also recommended that local authorities review their Code each year to ensure it remained compliant and up to date.

 

The Monitoring Officer has reviewed the Code to ensure it still reflected the current governance arrangements of the Council and considered that no updates were required to the current Code as it still reflected the current governance arrangements of the Council.

 

In addition, the Council was currently undertaking a review of its Constitution, which formed a fundamental part of the governance arrangements of the Council, and therefore directly affected the Code of Corporate Governance.

 

This report therefore recommends that the current Code of Corporate Governance be confirmed by the Audit Committee, rather than amend it, with a view to an interim update after the Constitution is reviewed to realign the Code with it.

 

A member questioned how the Council monitored that the Code was being adhered to. It was explained that in terms of Principle 1, one of the documents was the Constitution and this ensured the right people made the right decisions. Regarding Principle 2, this ensured openness and comprehensive stakeholder engagement with the Corporate Plan. Overall, the Code was owned by different officers and Committees, but ultimately the Statutory Officers were the officers that took main responsibility for adherence to it.

 

In response to a question, it was explained that the Council undertook a review of the KPIs to ensure the Corporate Plan objectives were being met and the cycle was explained.

 

In response to a question regarding “social value”, it was stated that this could be more clearly defined, however the housing delivery strategy could demonstrate social value as an example. The Council also included areas of social value in its contract management.

 

With regards to the following bullet point on page 81 of the report:

 

Ensure the Leader and the Head of Paid Service/Directors have clearly defined and distinctive leadership roles within a structure whereby the Head of Paid Service/Directors lead in implementing strategy and managing the delivery of services and other outputs set by Members and  ...  view the full minutes text for item 34.

35.

Audit Work Programme and Schedule 2023/24 and Action Tracker

To discuss and agree any changes to the schedule for Audit Committee’s Work Programme 2023/24 and note the Action Tracker.

Supporting documents:

Minutes:

The Clerk explained that the work programme set out the intended work to be carried out by the Committee over the coming municipal year. This was a live document and was subject to change according to requirements and availability of information. The action tracker gave an overview of the status of the actions that were requested at the previous meeting.

 

RESOLVED that the work programme be noted.

36.

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.

37.

Exempt Business

RECOMMENDED that members of the Press and public be excluded from the meeting for part of items 4 and 5 of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:

 

3. Information relating to the financial or business affairs of any particular person (including the authority holding that information).

 

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 items 4 (Risk Management - Quarter 2 2023/24) and 5 (Internal audit - Quarter 2 2023/24 progress report) 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 paragraphs 3 and 7 of Part 1 of Schedule 12A of the Act.

 

3. Information relating to the financial or business affairs of any particular person (including the authority holding that information).

 

7. Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime.