Agenda and minutes

15.1           The evacuation procedure, as noted on the Agenda, was advised to those present.

15.2           The Chairman welcomed Alex Walling, Engagement Lead from Grant Thornton, to the meeting.  It was noted that David Johnson, Audit Manager for Tewkesbury Borough Council from Grant Thornton, would also be attending the meeting but was running late. 

16.1           The Committee’s attention was drawn to the Tewkesbury Borough Council Code of Conduct which was adopted by the Council on 26 June 2012 and took effect from 1 July 2012.

16.2           There were no declarations made on this occasion.

To approve the Minutes of the meeting held on 24 June 2015.

17.1           The Minutes of the meeting held on 24 June 2015, copies of which had been circulated, were approved as a correct record and signed by the Chairman. 

To consider Grant Thornton’s audit findings 2014/15.

18.1           Attention was drawn to Grant Thornton’s report, circulated at Pages No. 12-45, which set out the audit findings for the Council for 2014/15.  Members were asked to consider the report. 

18.2           Alex Walling, Engagement Lead from Grant Thornton, explained that the report highlighted the key findings from Grant Thornton’s audit of the Council’s financial statements for the year ended 31 March 2015.  Under the Audit Commission’s Code of Practice, Grant Thornton was required to report whether, in its opinion, the Council’s financial statements represented a true and fair view of the financial position, its expenditure and income for the year, and whether they had been properly prepared in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting.  In addition to this work, Grant Thornton was also required to reach a formal conclusion on whether the Council had put into place proper arrangements in terms of the Value for Money (VFM) conclusion.

18.3           Members were advised that today was the deadline for issuing opinions and by the end of the meeting the Statement of Accounts 2014/15 and Letter of Representation would both be approved and posted online.  It was anticipated that an unqualified opinion would be issued in respect of the financial statements which meant that they represented a true and fair view.  The accounts contained only a small number of errors, the majority of which had been adjusted by management, and the working papers continued to be of good quality with staff responding promptly to all queries.  One area which had been flagged up was bad debt provision for housing benefit; this was not an error but it was on the low side, particularly given the move towards Universal Credit.  No adjustments had been identified affecting the Council’s reported financial position which was very positive.  In terms of VFM, Grant Thornton proposed to give an unqualified conclusion again this year.  One area which had been highlighted for Tewkesbury Borough Council, and the majority of other local authorities, was the longer term financial position of the Council.  Whilst there were no issues with the arrangements within the Council, there was a potential overreliance on New Homes Bonus which was a concern given that there were so many unknowns going forward.  There had been no issues with the whole accounts and no significant weaknesses had been identified within the internal controls.  A small number of recommendations had been made and were set out at Appendix 1 to the report.  The Engagement Lead thanked the Finance team and reiterated that the arrangements in place at the Council were generally very good, the working papers were excellent, and the team was very prompt in responding to audit queries.

18.4           In drawing attention to Page No. 20 of the report, the Engagement Lead explained that there were two presumed significant risks which were applicable to all entities, whether corporate or public sector: improper revenue recognition, as there was a presumed risk that revenue may be  ...  view the full minutes text for item 18.

To consider the S.151 Officer’s Letter of Representation on the closure of the accounts for the year ended 31 March 2015.   

19.1           Attention was drawn to the Section 151 Officer’s Letter of Representation on the financial statements for the year ended 31 March 2015, which had been circulated at Pages No. 46-48.  Members were asked to consider the letter.

19.2           The Finance and Asset Management Group Manager indicated that, as the Council’s Section 151 Officer, he was required to write a Letter of Representation to the external auditors which outlined the principles on which the accounts were based, and confirmed compliance with the law, as well as disclosing any fraudulent activity that may have taken place. The letter also confirmed that the Section 151 Officer had not played an active role in the production of the accounts and so could perform his Section 151 duties independently.

19.3           In response to a query, Members were informed that there had been no significant changes to the Letter compared to the one which had been approved the previous year.  Accordingly, it was

RESOLVED          That the Letter of Representation be APPROVED and signed by the Section 151 Officer.

To approve the Statement of Accounts 2014/15. 

20.1           The report of the Finance and Asset Management Group Manager, circulated at Pages No. 49-147, set out the Statement of Accounts for 2014/15.  Members were asked to approve the Statement of Accounts as attached at Appendix 1 to the report.

20.2           The Finance Manager explained that the Statement of Accounts was a statutory document which demonstrated the Council’s financial position at the end of the financial year.  In line with the revised Accounts and Audit (England) Regulations 2011 guidelines, approval of the accounts was now made by the Section 151 Officer by 30 June, the accounts were then audited and amended, if necessary, by 30 September before the Section 151 Officer signed the accounts again.  Those accounts were then approved by the Audit Committee and signed by the Chairman.

20.3           In terms of income and expenditure, Members were advised that working balances had remained at £450,000 and the Council had underspent against its net budget by £78,000 in the year.  In terms of the overspends, additional costs had been incurred as a result of savings plans not being met, most notably in respect of staff savings as the Council now had a much smaller workforce and a lower turnover of staff; a £94,000 one-off cost was associated with the transfer of Waste Services to Ubico and the resultant release of the Council from the rental contract for the Swindon Road Depot; there had been an overspend as a result of benefit claims expenditure being higher than budgeted, and it was noted that the Council had not been able to process all claims in order to reclaim the total amount paid out from Government subsidy.  With regard to underspends, grant funding had not been fully utilised; additional income had been generated through trade waste and garden waste; income from planning and land charges was above budget; and there had been additional recovery of Council Tax overpayments relating to previous years.  The Council had also released earmarked reserves from the previous year which had been set aside to fund future expenditure but had subsequently not been required in full, however, the Council had also recognised an additional requirement for future reserves which had been approved by Executive Committee in July 2015.  This had resulted in a change of £78,000 which matched the underspend for the year and, as such, there was no change in the working balances held at year end.

20.4           The Finance Manager went on to explain that the total net worth of the Council had decreased by £4.2M to £1.8M.  The decrease in worth was summarised in the Movement in Reserves Statement, contained within the Statement of Accounts.  One of main factors was an adjustment relating to the accounting for business rates due to the impact of a large refund to Virgin Media which had a successful appeal against the rateable value that had been applied dating back to 2005.  Other adjustments included a reduction in the capital receipts reserve, as the Council had paid for improvements to  ...  view the full minutes text for item 20.

To recommend to the Executive Committee that the revised Prosecution Policy for the Council Tax Reduction Scheme be approved.

21.1           The report of the Revenues and Benefits Group Manager, circulated at Pages No. 148-163, set out the current position regarding the Prosecution Policy for the Council Tax Reduction Scheme.  Members were asked to recommend to the Executive Committee that the revised Prosecution Policy be adopted, as set out at Appendix 2 to the report.

21.2           Members were advised that the Council was no longer required to investigate and prosecute Housing Benefit and Council Tax fraud as those responsibilities were now being carried out by the Single Fraud Investigation Service and the Crown Prosecution Service.  The Borough Council still had a responsibility to investigate Council Tax Reduction Scheme Fraud, which was the replacement for Council Tax Benefit.  On that basis, it was necessary to review the existing Prosecution Policy and make appropriate changes.

21.3           Referring to Paragraph 2.2 of the report, the Revenues and Benefits Group Manager explained that the main changes would remove any reference made to Housing Benefit and Council Tax Benefit and replace them with ‘Council Tax Reduction Scheme’; include Council Tax Reduction Scheme offences; change the title of the Revenues and Benefits Manager to read ‘Revenues and Benefits Group Manager’; make changes to the section covering administrative penalties to reflect the Council Tax Reduction penalty requirements and delete the section on collection of the penalty; and include a section on other penalties where the Borough Council could impose a penalty of £70 for cases where it was determined that fraud had not been committed and the person had either been negligent in making an incorrect statement, or had no reasonable excuse in failing to notify the Borough Council of a change in circumstances.  All changes were highlighted at Appendix 2 to the report.

21.4           In response to a Member query regarding the imposition of penalties, the Revenues and Benefits Group Manager clarified that there was a new penalty which could be applied in cases where it was determined that fraud had not been committed and the person had either been negligent in making an incorrect statement, or had no reasonable excuse in failing to notify the Borough Council of a change in circumstances.  The £70 penalty rate was set by the Department for Work and Pensions and could not be amended.  A Member queried how this would be enforced and was advised that Officers would investigate cases as they had done previously with Council Tax and Housing Benefit when they had been able to administer penalties if appropriate.  The Member went on to question whether the penalty would cover the cost of carrying out the investigation.  The Revenues and Benefits Group Manager indicated that this would depend on the length of the investigation and the amount of work that had gone into the process; if the Council had been made aware of the change of circumstances within a reasonable period then an investigation may be unnecessary and the penalty would cover the cost of Officer time, however, a full fraud investigation could cost up to £3,000.  ...  view the full minutes text for item 21.

To consider the audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited for the period April to August 2015.

22.1           The report of the Corporate Services Group Manager, circulated at Pages No. 164-204, was the first monitoring report of the financial year and summarised the work undertaken by the Internal Audit team during the period April to August 2015.  Members were asked to consider the audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

22.2           Members were advised that the Internal Audit team consisted of two full time equivalent posts.  Due to maternity leave, one of the posts had been covered by a secondment arrangement, however, that employee had recently been successful in obtaining a permanent position within the Corporate Services team and a temporary resource would need to be brought in between now and the end of quarter 3.  It was noted that no incidents of fraud, corruption, theft or whistleblowing had been reported during the period.  As advised at previous Audit Committees, the Internal Audit team had been commissioned by Tewkesbury Town Council to undertaken its internal audit.  The 2014/15 year end audit had concluded during the first quarter of 2015/16 and had been formally reported to the Town Council at its Council meeting on 29 June 2015.  An audit plan had been approved and the delivery of the action plan was monitored by the Town Council’s Finance Committee.

22.3           Full details of the work undertaken were attached at Appendix 1 to the report and a list of audits within the 2015/16 Audit Plan and their progress to date could be found at Appendix 2 to the report.  The Corporate Services Group Manager drew attention to the Local Government Transparency Code audit set at Page No. 167 of the report.  He explained that there was a Government drive to ensure that Councils were accountable for their spending and there had been a need to ensure that the relevant information was published on the Council’s website in accordance with the Code.  A number of days had been allocated within the 2015/16 Audit Plan and the audit had indicated that the Council was generally compliant overall.  The Department of Communities and Local Government was not monitoring compliance and therefore risk was minimal, however, it had indicated that it would react if complaints were received under the Freedom of Information Act.  It was noted that improvements were currently being made to the system used for recording Freedom of Information Act requests and this would be maintained by the Corporate Services team.  Members were informed that a limited opinion had been issued in relation to the audit of the complaints framework.  The main concerns were around the way that the data was logged as some entries were not complete; access to the log meant that there was potential for live entries to be deleted; the log did not record the date acknowledgements were sent which meant that it could not be demonstrated that they were being sent within the requisite time period; and there was no monitoring of complaints until the six  ...  view the full minutes text for item 22.

To consider the progress which has been made in implementing the Internal Audit recommendations to improve the control over ICT assets.

23.1           Attention was drawn to the report of the Corporate Services Group Manager, circulated at Pages No. 205-210, which asked Members to consider the progress that had been made in implementing the internal audit recommendations to improve the control over ICT assets.

23.2           Members were reminded that an ICT audit had been undertaken as part of the 2014/15 Internal Audit Plan and had concluded that there was an unsatisfactory level of control, largely due to the asset register being unfit for purpose and there being no documented procedures.  This opinion had been reported to the Audit Committee on 24 June 2015 and it had been requested that a progress report be brought to the next Committee on how the control issues identified were being resolved.  The ICT Manager advised that, since the review, the ICT team had worked with Internal Audit to produce a new set of procedures and an asset management spreadsheet.  The main changes which had been implemented involved purchase orders being made against each individual item on the asset register along with purchase dates; disposal was now checked with Finance before collection was arranged, disposal was arranged by the helpdesk and signed off by the ICT Operations Manager; annual review of all assets would now take place and users/departments that had signed out an asset would be asked to prove the location and condition of the asset; the asset register would have a check date and would be updated when the checks were completed; checks were run before equipment was disposed of and any hard drives must have a certificate of their destruction; mobile assets now needed to be signed in and out of ICT by the department/user that required it; assets were recorded against service, individual and purchase order number; and a full check had been completed to ensure that all items on the new asset sheet were accounted for.

23.3           In response to a query, the Finance and Asset Management Group Manager advised that the Council’s current Asset Management Plan ended in 2015; a new Plan had been drafted and would be taken to the Transform Working Group and Executive Committee later in the year.  A Member raised concern that some items being written-off may no longer be considered as assets if they had reached a certain age and he was assured that they were now given a depreciation value or a ‘life expectancy’, for instance, the average life expectancy for a PC was three to five years, which enabled Officers to identify when they would be due for replacement.  A Member questioned whether missing items would be covered by insurance and was advised that only the more expensive, high risk items were covered in those circumstances.  The Corporate Services Group Manager advised that a follow-up audit would be undertaken over the forthcoming months. 

23.4           It was

RESOLVED          That the progress which had been made in implementing the Internal Audit recommendations to improve the control over ICT assets be NOTED.

To consider the progress which has been made in relation to the recommendations arising from the risk assessments audit.

24.1           Attention was drawn to the health and safety risk assessments audit report, circulated separately.  Members were asked to consider the progress which had been made in relation to the recommendations arising from the audit.

24.2           The Environmental and Housing Services Group Manager indicated that it had been recognised that a more effective IT system was required for risk assessments, which would allow working documents and previous actions to be stored, and she confirmed that a draft system had now been put in place.  All existing health and safety documents would be transferred by the end of October which would allow more effective monitoring on a regular basis.  In respect of risk assessments managed by the Asset Management team, a management plan had been created to identify risk and gaps.  To date, the asbestos risk gap had been identified, considered, actioned and documented on the plan.  Members were advised that 25 Council-owned properties were included in the management plan; of those properties, nine were known to contain asbestos and a further two were suspected to contain asbestos.  An inspection programme was now in place to monitor the identified risks.  It was a similar situation in relation to Legionella and the Asset Management team was now receiving training.  Risk assessments had been seen for the six properties with the potential to attract Legionella.  Fire risk assessments had been commissioned since 2013; management plans were in place and would be updated by the end of October 2015.  All electrical installation inspections were up to date with regard to portable appliance testing and the information would be recorded on the management plan by the end of October 2015.

24.3           Members were advised that there had been very limited risk assessments in place for grounds maintenance when it had transferred to Ubico in April 2015, however, the review of risk assessments was already part of the Ubico work plan and, therefore, work was progressing.  More site specific risk assessments were being carried out for particular areas and arrangements had been made with Ubico to report back to the Council via the ‘Keep Safe, Stay Healthy’ Group.  In relation to the gaps identified within community and economic development, risk assessment and lone working training had already taken place.  A further health and safety audit would be carried out within the next six months to ensure compliance.  The risk assessment training had been open to all departments and had emphasised the importance of keeping risk assessments up to date which would assist the Health and Safety Officer going forward.

24.4           In response to a query regarding the properties which contained asbestos, the Finance and Asset Management Group Manager confirmed that two of the properties were tenanted and the Asset Management team was working with the tenants to attain the level of asbestos etc.  A Member asked that more detailed information be provided to the Committee about the different types of asbestos and the location of the high risk areas, and the Environmental and Housing Services Group  ...  view the full minutes text for item 24.

To consider the Risk Register and the risks contained within it. 

25.1           The report of the Corporate Services Group Manager, circulated at Pages No. 211-220, attached the corporate risk register which Members were asked to consider.

25.2           Members were advised that the Council’s overall risk management arrangements were overseen by the Corporate Governance Group and the corporate risk register, attached at Appendix 1, was a high level  summary document which had been endorsed by the Corporate Leadership Team; changes to the register since the last update were highlighted in bold.  It was noted that, if a devolution bid was accepted by the Government, this was likely to be a high level risk and would appear on the corporate risk register.  A Member queried if there was any progress in relation to the Joint Core Strategy and was advised that Members had recently been provided with a written update which indicated that there would be hearings in December designed to hear evidence as a result of further ‘homework’ set by the Inspector; there had been no changes since that time.  A Member raised concern that March 2016 had been set as the proposed implementation date for a number of risks contained within the corporate risk register.  In response, the Corporate Services Group Manager explained that some actions would be completed by March 2016 whereas some were year-end dates intended to reflect the progress made by that time.

25.3           It was

RESOLVED          That the information contained within the corporate risk register be NOTED.