Agenda and minutes

Governance and Audit Committee
Tuesday, 28th July, 2015 1.00 pm

Venue: Witham Room - South Kesteven House, St. Peter's Hill, Grantham. NG31 6PZ. View directions

Contact: Jo Toomey 

No. Item


Disclosure of interests


Minutes of the meeting held on 25 June 2015



    The minutes of the meeting held on 25 June 2015 were agreed as a correct record.


Updates from previous meeting


Internal Audit: Progress Report

    Report CFM334 from the Corporate Finance Manager                  (Enclosure)


    The Corporate Finance Manager introduced report number CFM334 on the progress report summarising internal audit activity between 1 April 2015 and 10 July 2015. Mr Barnett, Senior Manager from Baker Tilly presented its report. During the period four audits had been completed on partnerships, food safety enforcement, welfare reform and homelessness. The audit of partnerships was given an amber-green opinion while the other three audits were given a green opinion. Recommendations made in respect of all audits had been accepted by management. The programme of audit work was expected to be completed on schedule to enable internal audit to form its annual audit opinion by 31 March 2016.


    Members noted impending changes to the branding from Baker Tilly to RSM and the new format of the report and commented that the additional information it contained was useful in pre-empting questions prior to committee meetings.


    Two low and three medium risk recommendations were made following the audit of partnerships. Following questions, committee members were informed that only two partnerships suggested for review were considered as part of the audit because they complied with the definition set out in the Council’s Partnership Policy. Some concern was expressed that the Policy was last reviewed and updated in February 2011 however members were assured that a review was underway which included the definition of the term partnership and the requirements with which they had to comply to ensure the policy was fit for purpose and to ensure that the Council achieves best value through its partnerships. The revised policy would be presented to a future meeting of the committee for its consideration.


    Action Point


    That the revised Partnerships Policy be presented at a future meeting of the Governance and Audit Committee.


    The review of food safety enforcement led to one low risk and two medium risk recommendations. The first medium risk recommendations related to the amount of data held and how it was managed in conjunction with Data Protection requirements and the Council’s own retention schedule while the second related to the process through which food hygiene complaints were referred to the relevant officer for investigation. Committee members queried the implementation date for the recommendation relating to data retention. The Business Manager, Environmental Health informed members that the work was on target to be completed by the end of September 2015. She explained that the original deadline had been set as December 2015 as this was the first data cleansing exercise that had been undertaken and that different types of information had different retention requirements, complicating the exercise.


    A further question was asked which related to the process for the registration of new establishments and the timescales by which inspections would be completed. Members were notified that food businesses were required to notify the authority and register the business prior to opening. The timescale within which the business would undergo a food hygiene inspection was dependent upon the level of risk associated with the business.


    Three low risk recommendations were raised following the Homelessness  ...  view the full minutes text for item 17.


Draft Annual Governance Statement 2014/15

    Report CFM333 from the Corporate Finance Manager                  (Enclosure)


    The Corporate Finance Manager presented the draft Annual Governance Statement (AGS) 2014/15, which would form part of the Statement of Accounts and was attached to report number CFM333. The Committee was asked to provide feedback on its contents to ensure it accurately reflected the 2014/15 financial year. Members were reminded that the format and content of the document had been reviewed at the end of the 2013/14 financial year to make it more engaging for the reader. The Committee noted that the statement was deliberately reflective but did include a section looking at areas of future improvement and lessons learned. Councillors were informed that the Section 151 Officer, the Chief Executive and the Leader of the Council had all had input into the development of the document, which was based on information from internal and external stakeholders and incorporated the findings of internal and external audit and feedback from the Citizen’s Panel.


    Officers were complimented on the format and content of the document. Members asked for the views of both internal and external audit on the document’s content. The representative from Internal Audit stated that the content was common to other authorities across their client base and reflected the work that had been conducted around governance and the implementation of recommendations. The representative from External Audit stated that its role was checking that all required information had been included and it had a particular interest in any significant governance issues and making sure plans were in place to address those issues.


    A short discussion ensued on the budget setting process and the mechanisms through which councillors were briefed and could get involved.


    Members of the Committee commended the document and confirmed it was a true reflection of activity within 2014/15.


Draft Statement of Accounts 2014-15

    Report CFM331 from the Strategic Director (Corporate Focus) and the Corporate Finance Manager                                                                                                                  (Enclosure)


    The Corporate Finance Manager presented the draft Statement of Accounts for 2014/15, which was appended to report number CFM331. He explained that the Committee considered the Statement of Accounts on two stages, firstly in draft form in July, then the final version in September. The Committee was informed that the work being undertaken on the accounts by External Audit was coming to an end. A number of minor amendments had been made following the despatch of the draft report and members were informed that they would receive a schedule of all changes made between the dissemination of the draft and the publication of the final document in September.


    The Statement of Accounts followed prescribed criteria with supplementary statements being added to reflect the authority’s role as a billing authority and a housing authority. The key statements in the accounts were the Movement in Reserves Statement, Comprehensive Income and Expenditure Statements, Balance Sheet and Cashflow Statements.


    In going through the draft Statement page-by-page, the Chairman invited members of the Committee to ask questions and make comments. A summary of the topics discussed is included below:


    ·         The summary of activity in relation to the ‘Promote leisure, arts and culture’ section in the introduction should be made more robust with the addition of statistical and numerical information


    ·         A proportion of the £35k underspend for Waste and Recycling Management was attributed to health a safety training which was not fully delivered in year; this project has rolled over for completion 2015/16


    ·         Levels of bad debt write-off in 2014/15 were lower than budgeted levels with collections rates that were better than 2013/14 which were ascribed to the introduction of new methods of recovery


    ·         The impact of the revaluation on car parks has increased the annual depreciation charge by £36k


    ·         The purpose and level of drainage board levies, which members noted would be discussed by the Resources PDG in October 2015


    ·         The overspend on the ‘other expenditure’ headline within the Housing Revenue Account related to costs incurred relating to pension costs and the pooling payment to the Department of Communities and Local


    ·         The underspend against the ‘Grow the Economy’ aspect of the Capital Programme which related to the St Peter’s Hill Development would be reprofiled through the year as negotiations continued


    ·         The impact of a backlog of occupational therapy referrals on the allocation of disabled facilities grants and the repayment of the element of the underspent budget that was provided by government


    ·         Grounds maintenance (including the enforcement of contract standards) and street cleansing


    ·         The comprehensive income and expenditure statement showed transactions that were reversed out in reserves and put into unusable reserves so that there was no impact on the council tax payer


    ·         Approximately 5% of net expenditure was the threshold for day-to-day working balances not earmarked for specific usage; most reserves were tied to specific capital or revenue projects


    ·         Increased income on the balance sheet shown against current creditors particularly resulted from a DWP overpayment of £2.5m in respect of housing benefit subsidy


    ·         The purchase  ...  view the full minutes text for item 19.


Treasury Management Annual Report 2014/15

    Report CFM332 from the Corporate Finance Manager                  (Enclosure)


    The Corporate Finance Manager presented report number CFM332 which summarised treasury management activity in 2014/15. Key points in the report were highlighted for Members’ attention:


    ·         No additional borrowing had been undertaken

    ·         The biggest portion of borrowing related to the debt undertaken as part of the self-financing of the Housing Revenue Account

    ·         At 31 March 2015 the Council had investments totalling £43.653m

    ·         While interest rates were low, investments still provided a healthy return for the Council; rates of return were comparably favourable against other councils

    ·         Some debt maturity payments were made in 2014/15

    ·         Investments were in line with expectations in terms of income

    ·         Current rates meant that it was more prudent for the Council to fund capital projects through internal borrowing than through external borrowing

    ·         A review of the strategy would give the Council the opportunity to consider its appetite for non-typical deposit activities, e.g. gilts, bonds and other long-term safe deposits


    In response to questions, the Committee was given assurance that investments were made using a range of criteria to prevent exposing the authority to adverse risk and that all treasury management activity in 2014/15 complied with the Council’s strategy.


    The Committee noted the report and approved its contents.


Close of meeting