Agenda and minutes

15.1           The evacuation procedure, as noted on the Agenda, was taken as read.

15.2           The Chair welcomed the representatives from Grant Thornton - David Johnson, Audit Manager for Tewkesbury Borough Council, and Julie Masci, Engagement Lead - to the meeting.

16.1           Apologies for absence were received from Councillor R Furolo (Chair).  There were no substitutions for the meeting. 

17.1           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.

17.2           There were no declarations made on this occasion.

To approve the Minutes of the meeting held on 22 June 2016.

18.1           The Minutes of the meeting held on 22 June 2016, copies of which had been circulated, were approved as a correct record and signed by the Chair. 

To consider the Audit Committee’s Work Programme. 

19.1           Attention was drawn to the Audit Committee Work Programme, circulated at Pages No. 11-17, which Members were asked to consider.

19.2           The Corporate Services Group Manager indicated that both the Executive and Overview and Scrutiny Committees had their own work programmes and Officers felt that this was something which may also be of benefit to the Audit Committee.  The work programme formalised the items that would be coming to future meetings and would enable Members to monitor deferrals and raise queries about specific items in advance.

19.3           A Member noted that the work programme included a June meeting in 2017 and she queried whether this was correct.  In response, the Finance and Asset Management Group Manager clarified that the work programme had been drafted based on the current Committee cycle and the dates were subject to change; the schedule of meetings for 2017/18 would be agreed by Council in the New Year and the work programme would be updated accordingly.

19.4           Members welcomed the introduction of a formal work programme for the Committee and it was

RESOLVED          That the Audit Committee Work Programme be NOTED.

To consider Grant Thornton’s audit findings 2015/16. 

20.1           Attention was drawn to Grant Thornton’s report, circulated at Pages No. 18-54, which set out the audit findings for the Council for 2015/16.  Members were asked to consider the report.

20.2           The Engagement Lead from Grant Thornton explained that the report highlighted the key findings from its audit of the Council’s financial statements for the year ended 31 March 2016.  Under the National Audit Office Code of Audit 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, and its income and expenditure 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 conclusion.

20.3           Members were reminded that Grant Thornton had set out its plans for how it would approach the audit in March 2016 and no changes had been made.  Work on the financial statements was substantially complete but it would be necessary to carrying out some finalisation procedures before they were signed off.  This included consideration of the post-balance sheet which accounted for anything which had happened since the end of the financial year which had significant bearing on the accounts.  It was anticipated that an unqualified audit opinion would be issued in respect of the financial statements; there had been a small disclosure amendment but, overall, the reported position remained unchanged and the Engagement Lead praised the quality of the accounts which had been put together by the Finance Team.  In terms of wider responsibility, Grant Thornton looked at the Annual Governance Statement which was consistent with the financial statements and contained no exemptions.  The action plan attached at Appendix A to the report included two matters which had previously been reported to the Committee in March 2016.  In terms of value for money, Grant Thornton was satisfied that the Council had proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources and proposed to give an unqualified conclusion.  The audit fees were in line with those proposed in the Audit Plan at the start of the year and there were no issues which impacted on Grant Thornton’s independence as auditors.

20.4           The Grant Thornton Audit Manager drew attention to Page No. 26 which set out the level of materiality which was worked to; any errors were reported to the Council with the exception of three items which had a lower materiality level due to their sensitive nature.  Significant risks were set out at Page No. 27 and two risks had been identified which were applicable to all audits – fraudulent transactions in the revenue cycle and management override of controls.  Two “other” risks of material misstatement had been identified in the Audit Plan  ...  view the full minutes text for item 20.

To consider the S.151 Officer’s Letter of Representation on the closure of the accounts for the year ended 31 March 2016. 

21.1           Attention was drawn to the Section 151 Officer’s Letter of Representation on the financial statements for the year ended 31 March 2016, which had been circulated at Pages No. 55-57.  Members were asked to consider the letter.

21.2           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 and the level of information provided to Grant Thornton to complete the audit, as well as disclosing any fraudulent activity that may have taken place.  The content of the letter had been agreed with Grant Thornton and formal approval was now sought from the Committee.

21.3           Accordingly, it was

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

To approve the Statement of Accounts 2015/16. 

22.1           The report of the Finance and Asset Management Group Manager, circulated at Pages No. 58-163, asked Members to approve the Statement of Accounts for 2015/16 as attached at Appendix A to the report.

22.2           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, before the Section 151 Officer signed the accounts again.  Those accounts were then approved by the Audit Committee and signed by the Chair by 30 September.

22.3           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 £289,000 in the year.  With regard to overspends, there had been a series of business rate revaluations on various properties within the Borough, and the write-off of several debts which had proven to be irrecoverable, which had resulted in a deficit; housing benefit overpayments had continued to be over budget thereby reducing the recovery of subsidy; there had been a delay in obtaining a property for investment which was now scheduled for the end of the month; and only £126,000 salary savings had been made against a target of £182,000 leaving a £56,000 shortfall.  With regard to underspends, additional income had been generated from garden waste; a provision from 2014/15 had been released back into the base budget; and, significantly, an additional £592,000 had been received from planning and land charges fees.

22.4           The Finance Manager went on to explain that the total net worth of the Council had increased from £1.869M to £8.9M.  The increase in net worth was summarised in the Movement in Reserves Statement, contained within the Statement of Accounts.  One of the main factors was an increase of £6M on long term assets largely due to the expenditure on the new leisure centre; however, this did mean that there had been a decrease in investments due to the use of monies to fund its construction.  Total provisions had decreased due to successful business rates appeals and other rate reductions in year.  Other adjustments included a reduction in the Capital Receipts Reserve and a decrease in the pension deficit, mainly due to an increase in the net discount rate over the period.  The balance on the collection fund for Council Tax was a deficit of £1.331M at year end which was very positive.  Any balance would be redistributed amongst the precepting bodies of Gloucestershire County Council, Gloucestershire Police and Tewkesbury Borough Council based on a proportion of the total precept demand from each body.  The balance on the collection fund for business rates was a deficit of £10.646M at year end as a result of collecting less than estimated before the start of the financial year and  ...  view the full minutes text for item 22.

To consider the Internal Audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited.

23.1           The report of the Corporate Services Group Manager, circulated at Pages No. 164-185, 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 2016.  Members were asked to consider the adequacy of the internal controls operating in the systems audited.

23.2           Members were advised that full details of the work undertaken were attached at Appendix 1 to the report.  A satisfactory level of assurance had been found in the audit of the Public Services Network (PSN); whilst the Council’s code of compliance had been appropriately signed off, there were a number of ICT policies and procedures supporting the PSN which required reviewing and updating and it had been recommended that testing of the Security Incident Management Plan be carried out.  A previous audit of tree inspections had highlighted an unsatisfactory level of control which had acted as a catalyst for an overhaul of the whole process.  The Asset Manager had taken on responsibility for tree maintenance and new technology had been purchased which allowed Officers to enter information into a handheld device and upload it directly to the system.  However, it was noted that a limited opinion had been issued in relation to the audit of the previous regime as 191 of the 672 trees inspected were not formally owned by Tewkesbury Borough Council.  The Asset Manager reiterated that he had taken on responsibility for tree maintenance in winter 2015 and Ubico carried out the inspections between October and March.  As Ubico carried out grass cutting on behalf of the Council and had knowledge of the Borough, it had been wrongly assumed that the operatives also knew which trees were owned by the Council.  Unfortunately there had been a lot of changes historically and there were areas which the Council did not currently own but were intended for adoption by the local authority following development, for example, the housing estate in Mitton which, although maintained by the Council, had never been formally adopted.  It was necessary to undertake some additional work to review the unadopted areas and the outcomes to resolve the issues would be presented to Members in a further report.  In terms of the new procedure for inspections, trees were allocated zones from one to five, with zone one being trees in high traffic areas – and therefore high risk - and zone five being trees in densely wooded areas.  Officers had visited and categorised the sites in June and Ubico had been instructed where to carry out work on behalf of the Council.  In response to a query, the Asset Manager explained that tree inspections were not carried out in the summer months, although there could be ad-hoc reports from the public which were logged by Customer Services and reported to Ubico through the software system.  All dialogue was via the software system and all plotting was carried out on the hardware system which was able to plot trees to within  ...  view the full minutes text for item 23.

To recommend to the Executive Committee the approval of the updated Anti-Fraud and Corruption Policy. 

24.1           Attention was drawn to the report of the Finance and Asset Management Group Manager, circulated at Pages No. 186-219, which asked Members to consider the updated Anti-Fraud and Corruption Policy and to recommend it to the Executive Committee for approval.

24.2           The Legal Adviser explained that, following a change in legislation, the Gloucestershire local authorities and West Oxfordshire District Council had successfully bid for £403,000 from the Department of Communities and Local Government to develop a Counter Fraud Unit for the investigation of housing benefit fraud.  The draft Anti-Fraud and Corruption Policy, attached at Appendix A, had been developed to reflect the changes and to set out a procedure for investigating and detecting fraud, money laundering, bribery and corruption.  A list of roles and responsibilities was detailed at Pages No. 196-200 of the report and included the Section 151 Officer, Monitoring Officer, Audit Committee, Councillors, External Audit and the Head of Internal Audit.  Once adopted by the Executive Committee, the policy would be updated and brought to the Audit Committee for consideration every three years.

24.3           In response to a query, Members were informed that one of the next stages would be to look at business rates and fly-tipping to see if any prosecutions could be made in those areas.  A Member questioned whether a cost-benefit analysis was available in terms of the number of cases being taken to court and whether negotiations took place in respect of decisions.  The Finance Manager indicated that this information had not been made available to Officers but it could be provided to Members following the meeting.  The Finance and Asset Management Group Manager advised that the Council had been working with the Counter Fraud Unit for six months on a number of initiatives, for example, the team had carried out a review of single person council tax discount which had resulted in £17,000 of additional income on an annual basis.  Whilst the focus had been on benefit fraud in recent years, there was potential for fraud in a number of areas and it was only right for the Council to take action and prosecute if possible.  A Member queried whether there was a policy of making prosecutions public to act as a deterrent to others and he was advised that, whilst there was no formal policy, raising awareness was something which the Council looked to do both internally and externally.  In response to a query regarding negotiations, the Borough Solicitor explained that there were a range of responses which could be taken in respect of any particular case; court action was only taken if there was enough evidence.  A Member queried whether the policy included embezzlement and the Legal Adviser explained that this was dealt with by the Code of Conduct which was very clear about what employees and Members should and should not do. 

24.4           It was

RESOLVED          That it be RECOMMENDED TO COUNCIL that the Anti-Fraud and Corruption Policy be APPROVED.

To recommend to Executive Committee that the updated Whistleblowing Policy be approved, subject to any minor amendments as a result of consultation with the GO Shared Service partnership (GOSS).

25.1           The report of the Corporate Services Group Manager, circulated at Pages No. 206-219, attached the updated Whistleblowing Policy.  Members were asked to recommend to the Executive Committee that the policy be approved, subject to any minor amendments as a result of consultation with the GO shared service partnership.

25.2           The Committee was advised that the Council had been working with the Counter Fraud Unit to review the Whistleblowing Policy which had been developed in consultation with the four authorities in the GO Shared Service partnership; Cheltenham Borough Council, Cotswold District Council, West Oxfordshire District Council and the Forest of Dean District Council. The policy, set out at Appendix 1 to the report, had been updated to reflect legislative requirements and employer responsibilities to ensure the Council protected staff who reported any areas of concern within the authority and to safeguard those against whom allegations were made.  The policy restricted the people who knew about potential disclosures to the Monitoring Officer, Chief Executive and Head of Human Resources as the majority of people wished to remain anonymous.

25.3           A Member questioned whether employees and Members knew who they should report any concerns to and the Legal Adviser indicated that training would be delivered to staff in December and she was happy for this to be extended to Members.  Once approved, the policy would be published internally, via the intranet, and externally on the Tewkesbury Borough Council website although it was acknowledged that not everyone had access to IT.  A Member queried whether the policy could be rolled out to Parish Councils.  In response, the Legal Adviser explained that the counter fraud service provision was a partnership agreement which involved several different authorities. Whilst anyone was entitled to look at the Council’s policies, Parish Councils were covered by the Advisory, Conciliation and Arbitration Service (ACAS), a publically funded independent organisation that aimed to promote better employment relations, and would have resources to support any Parish Councils that wished to adopt their own policy.

25.4           It was

RESOLVED          That it be RECOMMENDED TO THE EXECUTIVE COMMITTEE that the updated Whistleblowing Policy be APPROVED, subject to any minor amendments as a result of consultation with the GO Shared Service partnership.

To endorse the Regulation of Investigatory Powers Act 2000 Procedural Guide and to approve the Social Media Policy. 

26.1           Attention was drawn to the Solicitor’s report, circulated at Pages No. 220-248, which attached the Regulation of Investigatory Powers Act (RIPA) Procedural Guide and the Social Media Policy.  It was noted that there was an error in the recommendation and that Members were asked to consider the documents and recommend them to the Executive Committee for approval.

26.2           In accordance with the guidance issued by the Home Office, it was recommended that Councillors were involved in the annual review of RIPA policies and the report before Members was the annual report for 2016.  Use of the Act had changed significantly since it had been introduced and it was now quite unusual for the RIPA procedure to be initiated; the Council had not had any RIPA authorisations for the past five or six years but it needed to have a Policy in place in the event that it was required.  One of the main points was that, in order to carry out covert, or ‘intrusive’, surveillance, it was necessary to go to a Magistrates Court to obtain authorisation, it could not be done via an Officer.  This was much stricter than it had been previously to ensure there was no abuse of the process.  Officers had been looking at using RIPA for fly-tipping but they would have to be prepared to go to court for authority to carry out any covert surveillance.  The current RIPA procedure had last been revised in December 2014 and no changes were proposed, however, the Office of Surveillance Commissioners (OSC) had strongly recommended that a Social Media Policy be introduced due to the increasing internet traffic and the use of social networking sites by traders, companies and individuals that may result in criminal activity.  A policy had been drafted and was attached at Appendix 2 to the report.  The Legal Adviser explained that, whilst the Council had a corporate Facebook account which was open and transparent, it may be possible to carry out covert surveillance by setting up another account and  posing as someone else in order to obtain information from people who may be acting criminally, for instance, someone posting information about fly-tipping.  This was a complex process and it was important that there was a policy in place to cover such investigations.

26.3           A Member indicated that people increasingly shared information online and he felt that social media was a good way to catch out criminals.  He questioned whether the Council would be able to work with the Police as they were often able to act more quickly than the local authority.  The Borough Solicitor explained that this would depend on the circumstances; the Police may not want to be involved if the Council had powers to act.  She reiterated that the policy only applied to activities which the Council could potentially prosecute for, not general criminal activity; if anything of that nature was spotted on social media then it would be referred to the Police.  A Member raised concern that information posted  ...  view the full minutes text for item 26.