Agenda and minutes

Governance and Audit Committee - Wednesday, 25th July, 2018 2.00 pm

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

Contact: Anita Eckersley 

No. Item



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    An apology for absence was received from Councillor Damian Evans.


    An apology for absence had also been received from Councillor Adam Stokes.


Disclosure of interests

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    Members are asked to disclose any interests in matters for consideration at the meeting.


    No interests were disclosed.


Minutes of the meeting held on 21 June 2018 pdf icon PDF 236 KB

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    The minutes of the meeting held on 21 June 2018 were proposed, seconded and agreed as a correct record.


Updates from previous meeting

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    The Assistant Director Housing provided a brief verbal update on the monitoring of the Gas Boiler Company and the issues experienced with frozen pipes during the Winter.  He referred to a request from Members at a previous meeting for a report on what action was being taken to ensure there were no frozen pipes in the future and what monitoring process of the Gas Boiler Company was in place. He informed the Committee that a report would be presented to the next meeting of the Committee and would contain greater detail on the work being undertaken to ensure that the issues did not arise in the future.


    The Assistant Director Resources circulated a briefing note that provided Members with an update they had requested regarding IT Services and Cyber Security Internal Audit. In respect of remote working, the IT Security Policy and the associated Remote Working Policy had been updated. A remote working form was to be issued as part of the new flexible process when the lap tops were deployed in October 2018.  This would enable remote working.


    The third-party access register had been updated and now included; the period for which access was required, a review period for granting access and confirmation that a confidentiality agreement had been signed and retained.


    In respect of password expiry dates this would be more technically feasible once the old Thin Client solution had been phased out.


    The Committee was assured that Internal Audit would be checking and monitoring the position in respect of the of the above aspects.


Audited Statement of Accounts 2017/18 pdf icon PDF 1 MB

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    KPMG External ISA260 Report and CFM461 Report of the Cabinet Member for Finance



    Additional documents:


    Mr Norman, KPMG presented the External Audit Report ISA260 2017/18 and commented on the impact of the new compressed timescales.  He stated that KPMG anticipated that, subject to normal closing procedures, an unqualified opinion on the Council’s 2017/18 financial statements would be given before the deadline of 31 July 2018.


    Information checks from third parties was still required.  Some risks had been identified based on the initial assessments on Valuation of PPE and Pension Liabilities but these were common to all local authorities and partly due to the change in timescales.  In respect of the earlier statutory closedown timescale, the Authority had worked  with KPMG to try and understand the steps required to meet the new deadlines.  No audit adjustments were required. The quality and production of the work provided received an unqualified opinion.


    External Audit was required to provide a separate value for money conclusion as prescribed by the National Audit Office. No significant risks had been identified. Mr Norman explained that the 2017/18 Value for Money conclusion considered whether the Authority had proper arrangements in place to ensure properly informed decisions were taken and that the appropriate resources were deployed to achieve planned and sustainable outcomes for tax payers and local people. 


    The conclusion was that the Authority had proper arrangements in place to ensure properly informed decisions and appropriate resources were deployed to achieve planned and sustainable outcomes for tax payers and local people. KPMG recognised the ambitions set by the Authority and confirmed there were no concerns that needed to be brought to the attention of Members.


    External Audit reported that a balanced approach had been identified in all aspects where an audit had been undertaken and there were no concerns regarding accounting policies, accounting estimates and financial statement disclosures. The requested working papers had been supplied at the start of the audit progress and the officers’ response to further requests for working papers and information had been efficient.


    Reference was made to materiality for the Authority’s accounts being set at £1.5m which was unchanged from the External Audit Plan.  This figure equated to around 2% of gross expenditure.  The Letter of Management Representation did not contain anything that required Members’ attention.


    Mr Norman confirmed that all the requirements relating to objectivity and independence had been complied with.  In addition officers were commended for their help and assistance noting that it was a good outcome for the authority. 


    In response to a Members query about whether the Committee was required to meet with auditors without officers present which had been noted at some recent Audit Training, the Assistant Director, Resources, noted that it was good practice to meet with the Auditors and could be arranged if Members requested it. Mr Norman commented that meetings would normally only be arranged if Members had concerns they felt should be brought to the attention of the Auditors, but there was no specific requirement to meet in private with Committee Members.


    Discussion took place on the Audit Standards Risk Base  ...  view the full minutes text for item 19.


Treasury Management Outturn 2017/18 Report pdf icon PDF 131 KB

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    Report number CFM465 of the Cabinet Member for Finance.     (Enclosure)

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    The Assistant Director Resources presented Report number CFM465 that provided Members with details of the Council’s borrowing and investment portfolios as at 31 March 2018.


    The Council was required by regulations issued under the Local Government Act 2003 to produce an annual treasury management review of activities and performance against prudential and treasury indicators for 2017/18. This report met the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).


    The Governance and Audit Committee had delegated powers from Council to deal with matters relating to the Council’s Treasury Management activities.  Specifically it had the responsibility to monitor, review and amend as appropriate the Council approved Treasury Management Strategy during the course of the financial year.  The Committee during the course of 2017/18 exercised its delegated powers by reviewing the Treasury Management Strategy at its meeting on 14 December 2017.  Greater regulatory onus placed on Members meant they were required to review and scrutinise treasury management policy and activities. The report provided details of the outturn position following treasury activities and highlighted compliance with the Council’s policies previously approved by Members.


    During the 2017 Bank Rates increased and as a result of the slight increase in base rate, a higher than anticipated income from investments had been achieved. Slippage on Capital Income coupled with the higher income meant that even though overall performance rates were lower due to the depressed markets, the actual amount of investment income generated was £388k compared to the forecasted figure of £158k.


    The Committee was informed that quarterly monitoring was undertaken on investment income levels. Reference was made to the loan repayment of £25m in 2020 in respect of the HRA self-financing payment loans and the long term outstanding debt as at 31 March 2018 of £99.100m. No long term borrowing was required in 2017/18.


    As at 31 March 2018, outstanding short term borrowing was £3.222m.


    The Bank rate increase in November 2017 had meant that the accounts had healthier balances and provided an opportunity for short term fixed deposits to be made for amounts ranging from £1 million to £6 million.  These short term fixed rate deposits amounted to £52 million as at 31 March 2018. There was also £6.785m invested in instant access deposit accounts and notice accounts including Money Market Funds.


    Benchmarking information showed that the Council consistently performed better than neighbouring authorities in respect of average return rates. The Committee was informed that the current strategy together with the midterm figures would be provided at the next meeting.


    In response to a Member’s query about professional advice being sought on investments and who made the decisions, the Assistant Director noted that the Investment Strategy document had been agreed by Council and set out the processes and protocols to be followed. There were restrictions on certain types of organisations that the Council could invest in but there was a dedicated officer who monitored the investments  ...  view the full minutes text for item 20.


Close of the meeting

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    The meeting closed at 2.40pm.