Agenda and minutes

Apologies for absence were received from Councillor Ian Stokes and Councillor Peter Stephens.

Councillor Mark Whittington substituted for Councillor Ian Stokes.

Councillor Graham Jeal substituted for Councillor Peter Stephens.

The minutes of the meeting held on 12 July 2023 were proposed, seconded and AGREED as a correct record.

To consider updates on actions agreed at the meeting held on 12 July 2023.

The Chairman noted that the Statement of Accounts report would be heard at the meeting held on 29 November 2023.

The External Auditors presented the report which outlined their audit findings for the 2021/22 financial year.

There were no significant issues found within the external audit findings and the report included adjusted and unadjusted misstatements, primarily around minor discrepancies in testing of property valuations and the result of the tri-ennial pension valuation of the LGPS.

Clarification was sought around the property valuation differences and whether it was completed on a sample, and if so, what percentage of the overall assets were looked at.

The External Auditor confirmed that only a sample of properties were tested but the population was risk assessed when the sample was picked out. The properties considered to be most ‘out of line’ of expectations were generally selected.

As part of the External Auditors concluding, they had considered whether the sample could be indicative of wider problems within the population. Assurance was given that the samples were a fair reflection of the issues within the population as a whole.

One Member noted that the pension liability had increased by £4.3m. It was requested as to what the level of risk would be around the pension liability.

The 2021/22 accounts included the tri-ennial evaluation of the LGPS which was a full evaluation of the fund, as at the 31 March 2022. It gave better information about the membership and liability of the fund as a whole than the previous information. The number in the accounts was the most accurate estimate that was possible to make of the viability.

It was queried as to whether the significant risks outlined were specific to South Kesteven District Council or whether they were general risks identified across several Council’s.

The External Auditors clarified that the significant risks identified for South Kesteven District Council were effectively the three risks usually identified across all of Local Government. Management override of controls was an assumed risk by all external auditors at all entities, regardless of sector. The valuation of the Council’s properties and the valuation of the Council’s pension liability were the two largest estimates in the accounts, therefore, generally were considered to be numbers most susceptible to error.

It was noted that the Council’s value for money arrangements had not been completed and therefore, the External Auditors were not in a position to issue the auditor’s annual report. It was queried as to whether this report had been provided and why the reasoning behind the delay of the report.

The External Auditors had not yet issued their annual report with the value for money findings within it. The delay had effectively been due to the external auditors prioritising the delivery of the financial statements audit over the delivery of the value for money work. Had any particular concerns been identified in relation to the value for money work, this would have been reported with urgency.

Work was being undertaken for a combined 2-year Auditor’s Annual report to cover the 2021/22 and the 2022/23 financial years. It was hoped to bring the report  ...  view the full minutes text for item 32.

The External Auditor presented the plan. The auditors were making good progress of the plan, it was hoped the plan would be completed by the end of November and be brought back to the next Governance and Audit Committee meeting.

The significant risks were the same risks as presented in the previous year, no findings from the 2021/22 audit were presented to any additional significant risks.

The materiality had slightly increased for 2023, which was often considered to be an increase in expenditure throughout the Council.

Regarding group audits, the auditors were placing reliance on the work completed by the company auditors for Leisure SK Ltd and they would be completing their own procedures for Gravitas Ltd.

It was queried as to whether the work undertaken by External Audit relied on the work produced by Internal Audit in terms of process and procedures.

A query was raised regarding management override of controls actions and whether any responsibility was left with Internal Audit on the control framework.

It was confirmed that External Audit did not rely on any work of Internal Audit. External Audit considered the work that Internal Audit had undertaken and had considered the findings as part of their risk assessment to determine whether there was any particular work in areas that may require more attention. All of External Audit substantive testing was done by the External Auditors.

One Member requested when the Committee would expect to see assurances and test results from the Lincolnshire Pension Fund.

External Audit were awaiting a response from the Lincolnshire Pension Fund to provide their date of assurance. The date was unknown at present.

The Assistant Director of Finance (Deputy S151 Officer) further confirmed that External Audit were not able to sign off the Council’s accounts until the Pension Funds Accounts had been audited and signed off by their own external auditors.

It was proposed, seconded and AGREED to accept the External Audit Plan 2022-2023.

Assurance Lincolnshire will present their progress report and this agenda will also include the Council’s management response.

The Internal Auditor presented the report. The report set out the purpose of the regular progress reports, which was to update the status of external audit and progress against the internal audit plan. The summary of the work completed was around issues that impacted on the Head of Internal Audit’s annual opinion.

The report included the performance dashboard, which included the 22% of work that internal audit had undertaken, as well as updates on internal audit activity where the concerns had been raised on the conduct of Officers.

Assurance Lincolnshire had been the Council’s Internal Auditors since April 2022. The Head of Internal Audit report that concerns had been raised with the Head of Paid Service in June 2023 regarding interactions and conduct between the Audit Team and Council Officer’s.

She added that, in August 2023, an audit had taken place on an element of governance delivery. During the assignment, it was her opinion that the behaviour observed resulted in a material breach to the Audit Charter which had been signed upon the contract in April 2022. At this point, the termination clause in the contract was activated for internal audit services.

On the 29 August 2023, Internal Audit met with the Head of Paid Service and issued the termination notice of 30 days.

One Member queried whether it was common for issues to arise and whether problems had occurred with any other of the auditor’s clients. 

It was confirmed that Assurance Lincolnshire had over 40 clients and these issues had not occurred with any other clients.

Concern was raised around accounts payable in respect of the debtors report and the issues identified on basic internal control assurance.

It was queried as to how the scoping of the Internal Auditor’s work had taken place and whether future internal audit work may require more in depth investigating.

The Head of Internal Audit explained that, in her opinion, due to the lack of liaison between Internal Auditors and the Council, audits were not scheduled in and therefore no scoping work had taken place. 

Internal Audit raised concerns of inaccuracies within the Officer’s management response to the debtor report. The management response stated that no actions were needed and the audit did not identify any fraud or error, this demonstrated to Internal Audit that Officers had a lack of understanding on the role and function of the impartial, qualified auditors. Internal Auditors would not base a risk rating on the amount of work required to address a tested fail or whether errors and omissions were found at that stage.

It was highlighted that South Kesteven District Council seemed to have one of the smaller internal audit plans in Lincolnshire. In the Internal Auditor’s opinion, the Council had a high issue of low assurance opinions across the control environment.

One Member requested the results of other Internal Audit’s that Assurance Lincolnshire had carried out.

Including the whistleblowing audit and the work that Assurance Lincolnshire had undertaken through 2022/23, the Head of Internal Audit reported  ...  view the full minutes text for item 34.

Assurance Lincolnshire will present their annual report and this agenda will also include the Council’s management response.

The Internal Auditor presented the report.

The Public Sector Internal Audit Standards required internal audit to undertake assessments of the overall adequacy and effectiveness of the organisation’s framework of governance, risk and control. Sources of information typically came from audits undertaken, observations, follow up implementation for actions agreed, any material risks identified, notable changes to objectives, processes and infrastructure and assurances from third line reports and regulators.

The work undertaken through the internal audit plan had not provided sufficient background information to make a determination solely based on the audit work. As part of the review process in May 2023, Internal Audit requested any second and third line reports that had been completed across the year. One of the reports requested related to the markets work cited as being completed by third party. This was deemed not relevant and there was no case of fraud.

The original review took place at the end of 2022/23, which was supported by the original action plan shared with the Committee in June 2023,which showed of the 30 tasks listed, 11 had completion dates prior to the end of March 2023.

The report summarised the key concerns which include six financial controls relating to payment to operatives charging fees for waste, trade fee anomalies and inconsistencies, pitch fees not reflective of pitch size, unclear fee calculations and application of discounts and calculations of cash collected and record keeping.

The Internal Audit Annual Report was noted.

The Committee also noted the Council’s management response included within the agenda pack with regard to this item.

The Governance and Audit Committee is requested to consider the results of a survey to all Members of the Council in respect of start times of the Council’s public meetings.

The Cabinet Member for Corporate Governance and Licensing presented the report to consider different times for meetings, and in particular Full Council meetings. A questionnaire had been undertaken to receive feedback from Members on their preferred times of meetings relating to Full Council, Cabinet and other Committee meetings.

There had been a 62% response rate on the questionnaire, however, it was not very conclusive on whether Members wishes to retain current meeting times or not, with the exception of Full Council.

The Assistant Director of Governance highlighted the overview of the questions asked on the questionnaire and the responses received, which were set out in the appendices to the report.

In regard to the timing of Full Council meeting, the majority of respondents wished for a revised times of Full Council and the most responses had a preferred start time of 2pm.  

In relation to Cabinet and other Committees, there was no response that outlined a request for the star times to change.  It was suggested that the Leader of the Council determines the start time of Cabinet and Chairman of other Committee’s determine the start times of their meetings.

It was proposed, seconded and AGREED to request the Chief Executive to consult with the Chairman of the Council regarding a 2pm start for Full Council meetings going forward.

(At this stage of proceedings, it was proposed, seconded and AGREED to extend the meeting beyond three hours in duration)

To report the content of the Local Government and Social Care Ombudsman’s Annual Review Letter for 2022-23.

The Cabinet Member for Corporate Governance and Licensing presented the report which was an annual report for 2022/23, recording the Council’s activities in relation to complaints investigated by the Local Government and Social Care Ombudsman. This report highlighted that three complaints had been subject to investigation by the Ombudsman during 2022//23, with one complaint being upheld from the perspective of the timescale associated with address the matter as opposed to the Council’s decision-making processes.

A concern was raised on the process of the Ombudsman Service being the final stage of handling issues. It was queried how aware Members and public were around the Council’s complaints process and how this led onto referrals to the Ombudsman.

It was recommended that training be provided to all Members and Officers on the Council’s complaints process in order that further clarity could be provided to members of the public should they require it.

The Assistant Director of Governance confirmed that the Council had a Customer Feedback Policy that set out the complaint process to the Council. Any correspondence received, at any stage of a complaint response set out what the next stage would consist of. The Ombudsman would not consider a complaint usually, if the internal complaints process of an authority had not been exhausted.

It was requested that a review of Council complaints be added to the Committee’s Work Programme for a future meeting.

ACTION: For the review of Council complaints to be added to the Committee’s Work Programme for a future meeting.

Concern was raised that the same Officer was dealing with stage 1 and stage 2 of a complaint. It was noted that stage 1 and 2 should be dealt with by 2 different Officers, which did occur in accordance with the Council’s policy.  

The Chief Executive clarified that housing complaints were not covered by the Local Government Ombudsman and were reviewed by the Housing Regulator as a separate Ombudsman arrangement.

The process of housing complaints was a strict process and differed from the corporate complaint process.

It was proposed, seconded and AGREED for Officer’s to collate a report to review the data on stage 1 and stage 2 complaints, number of complaints being referred to the Ombudsman and the number of complaints received in different services areas, to include those in relation to housing.

ACTION: For a review of the data on complaint’s be added to the Work Programme for the meeting being held on 24 January 2023.The data will include information from April 2023-January 2024.

One of the key areas for Governance and Audit Committee, as part of its terms of reference, is to monitor and review the counter fraud arrangements in place and the activities that are being undertaken to mitigate those risks. 

The Cabinet Member for Corporate Governance and Licensing presented the report that covered years 2022-2023. The Committee was requested to approve the contents of the report, including the proposed action plan for 2023/24.

Section 3 of the report provided details of the whistleblowing referrals received by the confidential reporting line, which had been managed by Assurance Lincolnshire on behalf of the Lincolnshire Counter Fraud Partnership and acted as a central point of contact.

Section 3.4 of the report detailed the number of whistleblowing referrals received by Lincolnshire Authorities. Section 3.7 included the categories of those allegations. Section 5 reported on the details of the arrangements the Council had in place for housing benefit and council tax support. It also provided a summary of the housing benefit overpayment recovery for 2022/23. Section 6 provided details of arrangements in place for single person discount fraud.

The Council’s primary approach for checking single person discount entitlement was tested via a countywide counter fraud review, which was likely to take place in 2023.

Section 7 of the report provided information regarding the process the Council followed in 2022/23 to ensure that eligible businesses had retail discount applied to their business rates account.

One Member raised concern of the Council’s high whistleblowing figures compared to other Authorities.

It was queried as to how housing benefit overpayments were made and what measures could be put into place to refrain the overpayments.

Clarification was sought around the process of business rate relief and the assurance of businesses receiving the correct level of relief or possible overpayments.

The Assistant Director of Finance (Deputy S151 Officer) clarified that the high number of whistleblowing referrals may be due to the Council being a housing authority. The Council primarily utilised the confidential reporting line for all whistleblowing, whereas other authorities may have different ways of reporting council tax fraud and housing benefit fraud.

A breakdown in the report highlighted that nine were related to potential tenancy fraud, eight for benefit and council tax fraud, one relating to business rates and four relating to anti-social behaviour.

It was clarified that housing benefit fraud was primarily due to tenants not informing the Council of their claims requiring a reassessment. If housing benefit and council tax support had been overpaid, the Council would make an arrangement with the individuals to repay the monies back to the Council.

The business rate relief was automatically applied to accounts ready for bills to be issued for April each year. Businesses were requested to complete an application form to state their eligibility for the relief. If the application form was not received, the relief was removed from the account in May of each year. The businesses could reapply for the relief if necessary, which would mean the businesses was not given relief that they would then be required to pay back to the Council.

It was queried as to what level of publicity was given to business rate relief for businesses. Concern was raised that certain businesses  ...  view the full minutes text for item 38.

This report presents the annual Health and Safety Report for 2022/23. It provides an overview of South Kesteven District Council’s management of health and safety. It summarises progress made, highlights areas for improvements, and identifies accident rates for the period 2022/23.

The Cabinet Member for Corporate Governance and Licensing presented the report that outlined the positive recording of health and safety measured and had received substantial assurance from auditors.

It was queried as to how the Council monitored whether policies were being followed or not.

The Health and Safety Lead confirmed that service areas undertook random monitoring of activities and independent monitoring by the Health and Safety Team was due to take place for higher risk safety areas.

One Member queried as to whether the annual report was in relation to Council employees or public that attended Council facilities.

The annual report considered the corporate operations within the Council and Council employees in terms of how the Council operated its risk control and mitigations with Officers and their practices.

Clarification was sought around the reason street scene had a high level of health and safety concerns. 

It was clarified that street scene had the highest number of accidents and incidents due to the large number of staff within the service area, being required to work within the public domain and operate a large number of different vehicles.

One Member queried the vehicle accidents and incidents and whether the outcome was injured members of staff or public. The Council’s fleet insurance was questioned as to the outcome of a third-party being involved in an accident or incident. 

Concern was raised on the number of vehicular incidents and clarification was sought around the mechanical failure that had occurred.

The mechanical failure was related to part of a caged vehicle that had a failure of the hydraulic ramp. There were three vehicles of this type at the time, and all three vehicles were removed from the service whilst the manufacturer investigated.

That the Committee:

1. Notes the Health and Safety report for the period 2022/23.

To provide a progress update regarding the Council’s Market Service Operational Action Plan.

The Deputy Leader of the Council presented the report which provided an update on the operations of the markets, not the future direction of the markets or the strategic review of the markets.

The appointment of a Markets Manager was ongoing and interviews were taking place.

It was noted that long term commercial viability of the markets was dependent on the outcome of any future market strategy which would influence future market operations.

One Member raised concern over actions marked completed in March 2023 on the action plan that were not complete in certain market towns. These related to the establish of working hours and roles, job descriptions, health and safety implications and consultation with impacted market operatives.

The Interim Assistant Director of Operations and Public Protection clarified that job descriptions had been written and evaluated. The job descriptions consultation with the market staff was due to take place during October/November 2023.

The report stated that formal consultation would take place during June 2023.

It was highlighted that the change of staff and the summer holidays had impacted the consultation being completed. Market staff only worked Thursdays, Fridays and Saturday, where 50% were causal staff and the other 50% were already working with the Council. 

The urgency of health and safety mitigations for the Council’s markets was emphasised.

One Member noted that the Council was starting to implement a ‘pay by card’ system for the payment of the stalls. It was queried as to whether any traders were not satisfied with the ‘pay by card’ option and as a consequence had indicated that they would not be returning to the market due to the payment type.

The Deputy Chief Executive (S151 Officer) clarified that traders also had a direct debit option available to pay for their stall. There had been no negative responses received in regard to payment types.

Operatives that collected payment in cash were depositing the monies on the day of the market.

It was noted that the job descriptions for the markets were being amended rather than re-created to reflect current practices of the markets. 

A query was raised on what provisions were in place for when markets were not busy and whether the traders were contracted to stay for a certain period of time.

That the Governance and Audit Committee:

1. Notes the updated position with respect to the Markets Operational Action Plan.

To consider the Committee’s Work Programme for 2023 – 2024.

The Committee noted the contents of the Work Programme 2023-2024.

There was no other business.

The Chairman closed the meeting at 14:05.