Agenda and minutes

Venue: Council Chamber, Town Hall, Bexhill-on-Sea

Contact: Louise Hollingsworth 

Media

Items
No. Item

AS21/30.

Election of Chairman

Minutes:

RESOLVED: That Councillor J. Barnes be elected Chairman of the Committee for the meeting.

AS21/31.

Minutes

To authorise the Chairman to sign the minutes of the meeting of the Audit and Standards Committee held on 27 September 2021 as a correct record of the proceedings.

Minutes:

The Chairman was authorised to sign the Minutes of the meeting of the Audit and Standards Committee held on 27 September 2021 as a correct record of the proceedings.

AS21/32.

Apologies for Absence

Minutes:

Apologies for absence were received from the Chairman of the Committee, Councillor Jeeawon and Parish Councillor Keith Robertson.

AS21/33.

Disclosure of Interests

To receive any disclosure by Members of personal and disclosable pecuniary interests in matters on the agenda, the nature of any interest and whether the Member regards the personal interest as prejudicial under the terms of the Code of Conduct.  Members are reminded of the need to repeat their declaration immediately prior to the commencement of the item in question.

Minutes:

Declarations of interest were made by Councillors in the Minutes as indicated below:

 

Barnes, J        Agenda Item 12 – Personal interest as Vice-Chairman and Company Executive Director for Alliance Homes (Rother) Ltd.

 

Thomas           Agenda Item 12 – Personal interest as Company Executive Director for Alliance Homes (Rother) Ltd.

AS21/34.

Code of Conduct Complaints Monitoring and Other Standards Matters pdf icon PDF 229 KB

Minutes:

The Committee received the routine report of the Monitoring Officer (MO) which set out brief details of the complaints received since the Committee’s last meeting held in June where complaints were considered and advised the Committee of other standards related matters arising since the Committee’s last meeting.

 

It was noted that this was the first meeting for the Council’s newly appointed Independent Person Robert (Bob) Brown and Parish Councillor Keith Robertson (who had been unable to attend). 

 

Since the last meeting there had been six valid Code of Conduct (CoC) complaints had been made against one district Councillor and five parish or town Councillors, all made by fellow Councillors.  In accordance with the wishes of the Committee, as none of the complaints had resulted in an investigation and a finding of fault, they were presented anonymously at Appendix 1 to the report.  During this time, one non-valid complaint had also been received against a district Councillor for alleged poor performance as a Councillor (not a code matter).  

 

Members were advised that the recommended outcome for cases C21/06 and C21/07 involved a local resolution in the form of an apology to the Parish Council.  The Subject Member had refused to apologise and, in such cases, the Council’s current arrangements was silent on this situation.  Members were requested to consider what action, if any, the Council should take in such cases, including referring for an investigation, doing nothing or sending a letter from the Chairman of the Committee.  Referring such matters for a formal investigation (if considered serious enough) would result in costs to the Council that were not recoverable and therefore in this particular case it was not considered to be in the public interest (financially) to pursue.  Sanctions against Subject Members who were found to be in breach of the Code of Conduct following a Hearing Panel were limited and in the case of Parish Councils, it was up to the Parish Council whether they acted on any recommendation.

 

If Members were minded to support the prospect of referring a complaint for investigation in these circumstances in consultation with the IPs, it was recommended that the MO be granted delegated authority to amend the “Arrangements” document to incorporate this provision.

 

After some discussion, Members agreed that, following a Subject Member’s refusal to accept a local resolution and it was considered not to be in the public interest to refer the matter on for formal investigation, a letter of rebuke should be written from the Chairman of the Audit and Standards Committee to the Subject Member and made public.

 

The MO advised that no formal standards related training had taken place since the Committee’s last meeting due to time constraints and other priority work.  With the appointment and commencement of the new Deputy Chief Executive and Monitoring Officer in January 2022, it was hoped that there would be increased capacity in the future in this regard.

 

Bob Brown and the MO had attended the MO Conference in October this year, held  ...  view the full minutes text for item AS21/34.

AS21/35.

Local Government and Social Care Ombudsman Complaints Monitoring pdf icon PDF 145 KB

Minutes:

Members considered the report of the Customer Services Manager that set out details of the five complaints made to the Local Government and Social Care Ombudsman (LGSCO) which had been determined since the Committee’s last meeting.  One was not upheld (no fault found in the Council’s actions) and four could not be investigated.

 

For the same period (28 May 2021 to 17 November 2021), Rother had received 107 non-ombudsman complaints.  Of these, 73 were non-complaints, 11 were resolved at the initial stage, 13 were a stage one complaint of which seven were not upheld, one was upheld and five were partially upheld.  Two were a stage two complaint, both of which were not upheld, and eight were awaiting determination/under investigation.

 

The Customer Services Manager explained that there had been learning outcomes from the complaints received and necessary steps taken to address them.  In the cases of planning complaints where customers had been aggrieved at decisions made, improving the management of customer expectations and communication throughout the process were required.

 

The Customer Services Manager agreed to provide further details after the meeting to Members of the Committee of the non-ombudsman complaints that were upheld and partially upheld and to include such information in reports to the Committee going forward.

 

RESOLVED: That the report be noted.

AS21/36.

External Audit Contract from 2023/24 pdf icon PDF 170 KB

Minutes:

Members received the report of the Assistant Director Resources which gave details of the procurement process to appoint external auditors covering audits from 2023/24 to 2027/28.

 

During Autumn 2021, all local government bodies needed to make important decisions about their external audit arrangements from 2023/24, either through their own procurement processes to make the appointment themselves or in conjunction with other bodies, or they could join and take advantage of the national collective scheme administered by Public Sector Audit Appointments (PSAA). 

 

The report proposed that the sector-wide procurement conducted by the PSAA would produce better outcomes, be more cost efficient and be less burdensome for the Council than a procurement undertaken locally.  If the Council wished to take advantage of the national auditor appointment arrangements, it was required under the local audit regulations to make the decision at full Council. The opt-in period started on 22 September 2021 and closed on 11 March 2022. To opt into the national scheme from 2023/24, the Council needed to return completed opt-in documents to PSAA by 11 March 2022.

 

RECOMMENDED: That:

 

1)         the Public Sector Audit Appointment’s invitation to opt into the sector-led option for the appointment of external auditors to principal local government and police bodies for five financial years from 1 April 2023 be accepted; and

 

2)         the Chief Finance Officer be authorised to opt in to the national scheme for auditor appointments for the provision of external audit services starting with the audit of the 2023/24 accounts.

AS21/37.

Financial Procedure Rules Update pdf icon PDF 196 KB

Additional documents:

Minutes:

Members received the report of the Assistant Director Resources detailing updates to the Council Financial Procedure Rules (FPRs) to reflect changes made to the senior management team and to improve the operational efficiency of the Council and clarify any rules that were out of date or no longer applicable.  Any changes to the Constitution currently were required to go to Council via the Overview and Scrutiny Committee (OSC).  The revised FPRs would therefore be submitted to the OSC in the new year for ratification.

 

The most significant change that was proposed to the FPRs related to the approval and reporting arrangements for the writing out of the accounts (write off) of debts that cannot be or are unlikely to be collected, as shown in section Q.  The thresholds for requesting Member approval to the write off were proposed to be increased significantly, which would reduce the reporting to Members and increase internal process efficiency. However, it was proposed that these increased thresholds were restricted to those circumstances where the Council effectively had no choice but to write off, e.g. in the event of liquidation of a company or a debt relief order is granted to the debtor.  There was a requirement to report to Cabinet the total write offs made in a year under the various categories to ensure transparency.  Members requested that further information be provided concerning the scale of higher-level debts that had been written off in the past, which the Chief Finance Officer (CFO) would provide by way of email after the meeting.

 

Rule G35 had also been updated to better reflect its original intention regarding the need to carry out a review by Members of the specifications for the Council’s major service contracts, such as Waste Collection.  As such, the value threshold had been increased to an annual cost of £500,000. It was also proposed to amend the process and that the initial review should be undertaken by Cabinet who would then pass to the Overview and Scrutiny Committee for their views and recommendations back to Cabinet.  Members expressed concerns about an increase in the value threshold to £500,000 and agreed to recommend that this be amended to £250,000.

 

A new section, U, had been added to cover the responsibilities for officers when establishing a subsidiary company. This did not extend to the detailed requirements of the company, which would form part of their own internal governance arrangements. After some discussion, it was agreed by Members to recommend that the CFO discuss rewording  rules U8 and U9 with the Chief Executive, as the dual roles of officers left them in an advisory capacity in these circumstances only.

 

As two Members of the Audit and Standards Committee were also Board Members of Alliance Homes (Rother) Ltd (AH), Members recommended and agreed that a report be brought to the next meeting of the Committee to consider setting up a sub-committee specifically for further scrutiny and monitoring of AH.

 

RECOMMENDED: That, subject to the concurrence of the Overview  ...  view the full minutes text for item AS21/37.

AS21/38.

Report of the External Auditor, Grant Thornton - Annual Audit Letter 2019/20 pdf icon PDF 320 KB

Minutes:

The Chairman welcomed Trevor Greenlee from Grant Thornton to the meeting who proceeded to summarise the External Auditors’ Annual Audit Letter for the year ended 31 March 2020.  The External Auditors’ Annual Audit Letter summarised the key issues arising from the work that had been carried out by Grant Thornton in the areas of Financial Statements and Value for Money. 

 

Financial Statements – Grant Thornton issued an unqualified opinion on the Council’s financial statements on 1 October 2021.  As a result of the COVID-19 pandemic, the audit had taken longer to complete and   additional work had been required to address property asset valuations, as well as the Council’s net pension liability.  The Council’s accounts were prepared to a high standard.

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Value for Money – Grant Thornton was satisfied that in all significant respects, the Council put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2020.

 

Grant Thornton had not identified any matters which required them to exercise their additional statutory powers.  One risk was considered in the issue of Value for Money, but was found to be sufficiently mitigated.

 

The fees charged for services were detailed at the end of the letter.  Due to the requirement for additional work to be carried out over and above that originally envisaged in the audit plan, there was a proposed fee variation which was subject to approval by the Public Sector Audit Appointments.

 

In summary, Grant Thornton assured Members that the finances of the Council were being well managed by a well-run team.

 

The Chairman thanked the Chief Finance Officer and his team and the auditing team at Grant Thornton for their work.

 

RESOLVED: That the report be noted.

AS21/39.

Report of the External Auditor, Grant Thornton - Audit Findings Report 2020/21

Minutes:

Trevor Greenlee from Grant Thornton clarified that this report would be presented at the next meeting of the Audit and Standards Committee scheduled to be held on Monday 21 March 2022.

AS21/40.

Report of the External Auditor, Grant Thornton - Audit Risk Assessment 2020/21

Minutes:

Trevor Greenlee from Grant Thornton clarified that this report would no longer be required. 

AS21/41.

Internal Audit Report to 30 September 2021 pdf icon PDF 375 KB

Minutes:

The Audit Manager led Members through the internal audit report to 30 September 2021 that gave details of audit matters and any emerging issues, not only in relation to audit but risk management and corporate governance. 

 

Progress on the 2021/22 Audit Plan was currently running a few weeks behind schedule, but the position had improved since the last quarter and continued to do so.

 

Two audit reports were issued in the quarter and an overview of the findings arising from each was given in the Executive Summaries in Appendix A to the report.  Both audits provided substantial assurance on those areas reviewed.

 

Several audits were also nearing completion at the end of the quarter and had since been issued – these included reviews of the Grounds Maintenance Contract, the Blackfriars Project and Income Management. The Executive Summaries for these reviews and any other audit reports completed in the third quarter would be included in the next progress report.

 

Appendix B to the report updated Members on the progress made on implementing the audit recommendations reported at the previous meetings.  Six of the older year recommendations remained outstanding; three of these (Council Tax, ICT Network Security and ICT Governance) were now at an advanced stage and were all scheduled to be completed by March 2022 at the latest. However, progress on the other three cases (Procurement and the two Creditor recommendations) remained slow, and this was due in part to resourcing issues. The Chief Executive had been informed of the situation and was monitoring progress. However, the Head of Service responsible for all six issues was soon retiring meaning that the responsibility for resolving these outstanding matters would now fall to the relevant line managers.

 

Of the current year recommendations, almost half of these had already been implemented and work had begun on all other cases.

 

Every three years Internal Audit had traditionally produced a Strategic Audit Plan setting out the audits it intended to carry out over the next three-year period.  However, the need for a more responsive, adaptable approach to audit planning was brought into sharp focus during the COVID-19 pandemic, but, even in normal times, the rigid structure of a Strategic Audit Plan model did not cope well with major change.  With the new Strategic Audit Plan due to be reported to the Committee in the next quarter, it was therefore proposed that the 3-year Strategic Audit Plan be dropped in favour of standalone, annual audit plans. The Audit Manager would continue to use a risk assessment to determine what audits were included in the annual plan, but the move away from the existing model would provide greater flexibility and better use of limited resources.

 

Owing to the imminent retirement of the Assistant Director Resources, the Audit Manager had taken on responsibility for Risk Management Policy and for collating and reporting on updates to the Corporate Risk Register.  The Audit Manager’s role was limited to that of Risk Management Co-ordinator and it did not include any responsibility for  ...  view the full minutes text for item AS21/41.

AS21/42.

Work Programme pdf icon PDF 211 KB

Additional documents:

Minutes:

Consideration was given to the Work Programme, which contained details of the reports to be considered by the Audit and Standards Committee for the remainder of the 2021/22 municipal year and 2022/23.

 

An additional meeting was added for 11 April, as the agenda for the March meeting had become too full.  The following amendments to the Work Programme were made:

 

           a report on the setting up of a sub-committee of the Audit and Standards Committee to scrutinise and monitor the work of Alliance Homes (Rother) Ltd – 21 March;

           Grant Thornton – Audit Progress Report and Sector Update – moved from 21 March to 11 April;

           Grant Thornton – External Audit Plan Year ending March 2022 - moved from 21 March to 11 April;

           Grant Thornton – Annual Audit Report 2020/21 - moved from 21 March to 11 April;

           Annual Property Investment Update - moved from 21 March to 11 April; and

           Treasury Management Presentation added to 11 April.

 

RESOLVED: That the Work Programme attached at Appendix A, as amended, be approved.