Agenda and minutes

When the continuous alarm sounds you must evacuate the building by the nearest available fire exit. Members and visitors should proceed to the visitors’ car park at the front of the building and await further instructions (during office hours staff should proceed to their usual assembly point; outside of office hours proceed to the visitors’ car park). Please do not re-enter the building unless instructed to do so.

In the event of a fire any person with a disability should be assisted in leaving the building.  

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

To receive apologies for absence and advise of any substitutions. 

42.2          Apologies for absence were received from Councillors P A Godwin and P D McLain.  There were no substitutes for the meeting. 

Pursuant to the adoption by the Council on 26 June 2012 of the Tewkesbury Borough Council Code of Conduct, effective from 1 July 2012, as set out in Minute No. CL.34, Members are invited to declare any interest they may have in the business set out on the Agenda to which the approved Code applies.

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

43.2          There were no declarations made on this occasion.

To approve the Minutes of the meeting held on 15 December 2021.

44.1          The Minutes of the meeting held on 15 December 2021, copies of which had been circulated, were approved as a correct record and signed by the Chair. 

To consider the Audit and Governance Committee Work Programme.  

45.1          Attention was drawn to the Audit and Governance Committee Work Programme, circulated at Pages No. 12-18, which Members were asked to consider. 

45.2          Accordingly, it was

RESOLVED          That the Audit and Governance Committee Work Programme be NOTED.

To consider the external auditor’s annual report 2020/21.  

46.1          Attention was drawn to Grant Thornton’s annual report 2020/21, circulated at Pages No. 19-53.  Members were asked to consider the report.

46.2          The representative from Grant Thornton explained that there had been some changes to the value for money assessment with the scope being much broader than in previous years.  There was no longer a requirement to give a specific formal opinion on the arrangements, instead the external auditor’s reported in more detail on the authority’s overall arrangements focusing on three areas: financial sustainability, governance and improving economy, efficiency and effectiveness.  The report before Members was a high-level summary of work undertaken as part of the broader scope review.  In terms of the outputs from that assessment, under the new Code of Audit Practice, there were three types of recommendations that could be issued: unsatisfactory opinion - where real concerns had been identified in the authority’s arrangements which required prompt action; key recommendations – if significant weakness was identified; or, improvement recommendations – an opportunity to look at ways the authority could improve and strengthen the arrangements already in place.  An overall summary in relation to Tewkesbury Borough Council’s value for money arrangements and key recommendations was set out at Pages No. 21-22 of the report.  In terms of financial sustainability, no significant weaknesses had been found but four improvement recommendations had been identified.  With regard to governance, two improvement recommendations had been identified along with one key recommendation in relation to delivery of the Internal Audit Work Programme for 2021.  This had been discussed at a number of previous meetings of the Committee and, clearly, there had been a need to resource the response to the pandemic; however, this had been looked at across all authorities and, whilst a lot had scaled back internal audit resources to redeploy staff and support the wider Council response, Tewkesbury Borough Council was the only one that Grant Thornton was aware of so far which had not delivered any of its Internal Audit programme.  There was a lot of evidence of reduced programmes of work but others had delivered at least the minimum core programme in order to give assurance on systems of internal control.  The representative from Grant Thornton advised that, in a crisis situation, it was more important than ever to have a programme in place to ensure checks and balances were maintained as this was when authorities were more prone and susceptible to those controls being overridden and challenged.  There was now an opportunity to think about how to maintain a minimum level of resource for internal audit going forward and, as the Council began to move out of the emergency response and into the recovery phase, it was evident from the additional papers in today’s Agenda that internal audit was focusing on the future in terms of reinstating resources in the service and reinstalling the normal programme.  With regard to improving economy, efficiency and effectiveness, it was noted there were no significant weaknesses but two improvement recommendations had  ...  view the full minutes text for item 46.

To consider the risks contained within the Corporate Risk Register and assurance that the risks are being effectively managed. 

47.1          The report of the Head of Corporate Services, circulated at Pages No. 54-77, asked Members to consider the risks contained within the corporate risk register and assurance that the risks were being effectively managed.

47.2          The Corporate Director advised that the key updates since the last report to the Committee in December were set out at Page No 56, Paragraph 3.1 of the report.  With regard to Ref. 3 ICT Network Security, she explained that, given the recent national and local incidents, it was intended to recruit to a newly created cyber role; Ref 5. General Data Protection had been given more resource and all staff would be properly trained; the Carbon Reduction Programme Officer had commenced his role on 22 February which would assist with Ref. 15 Climate Change; and, in terms of Ref. 17 Waste Transfer Station, Grundon had gained planning permission in January 2022 which was good news from a management perspective as this was a serious risk which had been identified last time that had now been mitigated. 

47.3          At the last Committee meeting, a Member had questioned whether two additional potential risks should be included within the corporate risk register – the planning improvement plan and the five year land supply.  The Corporate Director advised that her view was that the planning improvement plan did not hold a high level of corporate risk in the same way as those listed in the Appendix to the report.  In terms of the five year land supply, it was not considered to be a risk for inclusion in the corporate risk register on the basis that the issues surrounding planning applications were dealt with on their own individual merits.  Notwithstanding this, it was felt that a risk ought to be included in relation to the review of the Joint Core Strategy which had been delayed more than anticipated so that would be included in the corporate risk register going forward.  A Member indicated that she perceived the lack of a five year housing land supply as a high risk to residents as well as a financial risk to the Council if applications were overturned at appeal.  The Corporate Director explained that was a risk of the planning system - planning was a regulatory service and decisions could be challenged by the operation of law which may result in the Council paying costs for that, sometimes even when it was successful; her view was that this was a service risk but not a strategic corporate risk.  The Head of Development Services pointed out there was a risk of appeal against refusal of planning permission even with a five year supply but that was the nature of the planning process.  The Member asked whether the five year supply would stop being a risk once the Borough Plan had been formally adopted and the Corporate Director explained that, whilst it should mean there was a five year supply, that did not stop applications being permitted which people did not want  ...  view the full minutes text for item 47.

To approve the accounting policies to be used in the preparation of the 2021/22 financial statements. 

48.1          The report of the Financial Services Manager, circulated at Pages No. 78-96, set out the main changes in accounting policies under the Code of Practice on Local Authority Accounting in the United Kingdom in 2021/22.  Members were asked to approve the accounting policies to be used in the preparation of the 2021/22 financial statements.

48.2          The Trainee Accountant advised that there were no major changes to the Code of Practice for the financial year beginning 1 April 2021.  The new standard IFRS16, which was a major change in the way leases were treated, had been deferred for another year until at least 2022/23.  It was noted that the Council had changed the depreciation on waste bins to 10 years rather than seven years in line with the manufacturers’ warranty.  A Member asked what the carrying value of the bins was and how the impact would be spread over 10 years rather than seven years and the Trainee Accountant undertook to provide that information following the meeting.  A Member drew attention to Page No. 82 of the report which referenced pensions and she pointed out that the County Council had recently reallocated 10% of its Brunel Pension Partnership fund to the newly formed Paris-Aligned Investment Initiative - a collaborative investor-led global forum enabling investors to align their portfolios and activities to the goals of the Paris Agreement -and, whilst she would like to see more progress in this regard, she felt this was a good start.

48.3          It was

RESOLVED          That the accounting policies to be used in the preparation of the 2021/22 financial statements be NOTED.

To approve the assessment of compliance with the Financial Management Code and to agree to receive an annual monitoring report on progress against the Code. 

49.1          The report of the Financial Services Manager, circulated at Pages No. 97-111, asked Members to approve the Assessment of Compliance with the Financial Management Code and to agree to receive an annual monitoring report on progress against the Code.

49.2          Members were advised that the Chartered Institute of Public Finance and Accountancy (CIPFA) had published the new Financial Management Code in October 2019 which was designed to support good practice in financial management and to assist local authorities in demonstrating their financial sustainability.  In terms of background, the Trainee Accountant explained that, in July 2018, an independent inspection of Northamptonshire County Council had found that failures at the Council were not due to a lack of funding but a result of poor management, a lack of budgetary control and a culture which discouraged challenge.  CIPFA had subsequently developed the Financial Management Code to align the Prudential Code, treasury management and the Code of Practice.  The Financial Management Code was based on six principles, as set out at Page No. 99, Paragraph 2.2. of the report, and beneath those were 17 standards which all authorities had to comply with as a minimum. 

49.3          The Financial Management Code had been due to come into effect from 1 April 2020; however, after further consideration of the ambitions within the Code and the wider resource challenges facing local authorities, particularly during the pandemic, CIPFA had concluded that, by 31 March 2021, local authorities should be able to demonstrate that they were working towards full implementation of the Code and the first full year of compliance would therefore be 2021/22.  Due to unprecedented pressures on Council services, the decision had been taken to delay full implementation of the Code until 2022/23; notwithstanding this, work had commenced and the self-assessment had been completed which had shown that, in comparison to other authorities, Tewkesbury Borough Council was performing well in terms of its day-to-day actions.  Appendix A to the report attached a draft Assessment of Compliance which included a number of identified actions to be taken forward to assist with the Council’s compliance with the 17 standards within the Code.  This would continue to be reviewed and refined and a formal assessment would be presented to the Committee on an annual basis.

49.4          A Member drew attention to Code Ref 1A on Pages No. 101-102 which referred to the Council having the sixth lowest Council Tax in England and questioned whether this was supposed to be viewed as a positive given that Cheltenham Borough Council received £2.5m more than Tewkesbury Borough Council because it had a “normal” Council Tax rate.  In response, the Head of Finance and Asset Management explained that was in the context of value for money for the taxpayer; the Council provided a good level of service at a very cheap price.  The Member felt it was important to take the opportunity to educate people and raise awareness of the implications of the low Council Tax rate.  Another Member indicated that she could  ...  view the full minutes text for item 49.

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

50.1          The report of the Head of Corporate Services, circulated at Pages No. 112-119, summarised the work undertaken by the Internal Audit team following release of resources from the COVID-19 business cell.  Members were asked to consider the audit work completed and in progress and the assurance given on the adequacy of internal controls operating in the systems audited.

50.2          Members were advised that, now the Internal Audit team was back up and running, a number of actions had been implemented since the last Audit and Governance Committee in December 2021 and these were outlined at Pages No. 113-114, Paragraph 2.2 of the report.  The actions centred around the people and processes to support the re-establishment of the Internal Audit team.  Two audits had been completed to date and full details were attached at Appendix 1 to the report – the main audit was in relation to the creditors system and the overall level of control had been found to be reasonable.  In terms of the recommendations arising from that audit, it had been found that purchase orders for some goods or services were being raised after receipt of the creditor invoice which could lead to understatement of commitments against service budgets and no documentation to match to the invoice to check the price etc. which required additional administration and delays in payment.  The second audit was in relation to the local authority COVID-19 compliance and enforcement grant to provide assurance that the monies had been spent in accordance with the grant conditions and in a timely manner.  The audit had confirmed a substantial level of control and a declaration form signed by the Chief Audit Executive had been issued.  Other corporate improvement work undertaken was detailed at Page No. 118 of the report and one outstanding recommendation arising from the risk management audit 2019/20 had now been implemented as set out at Page No. 119 of the report.  In terms of work in progress, the debtors audit had shown substantial compliance but three or four grant applications required sign-off by the Chief Audit Executive and that was currently being worked on.

50.3          Accordingly, it was

RESOLVED           That the Internal Audit Monitoring Report be NOTED.

To approve the Internal Audit Six Month Plan 2022/23 (April-September 2022) as detailed in Appendix 1. 

51.1          The report of the Head of Corporate Services, circulated at Pages No. 120-127, set out the proposed Internal Audit Plan for April-September 2022.  Members were asked to approve the six month plan as set out at Appendix 1 to the report.

51.2          The Head of Finance and Asset Management advised that, in normal circumstances, the plan would be delivered by two full-time equivalent members of staff.  Currently the team was resourced with 1.5 full-time equivalents due to the redeployment of resources to the business cell and information governance.  Plan delivery was based on 1.5 full-time equivalents plus additional resource from budget reserves which was ringfenced for technical ICT audit work which brought that up to 1.7 full-time equivalents.  From July, it was hoped that the work of business cell would come to a conclusion and the Internal Auditor could return to her team.  In addition, a new Information Governance Officer post had been approved as part of the 2022/23 budget so, as soon as that had been recruited to, a further 0.5 full-time equivalent could be returned to internal audit.  The Head of Finance and Asset Management indicated that he was also looking at new burdens funding to see if that would allow further investment in internal audit.  Taking all of this into account, it was hoped there would be 4.2 full-time equivalents delivering the Internal Audit Plan as opposed to the normal two which demonstrated the level of investment into the Internal Audit team which he hoped to see continue into the following financial year.  The Internal Audit Plan took into account several key aspects which were detailed at Pages No. 122-123 of the report.  It was noted that a number of days had been allocated for follow-up reviews - these had been somewhat neglected in recent months so it was necessary to pick up those recommendations and report back to Members as to whether they had been delivered.

51.3          The Chair welcomed the plan and the resources that were being put into its delivery.  He had recently had a positive meeting with the Internal Audit team and was confident that progress would now be made.  A Member recognised that internal audit cost money so it was a question of balancing risk against the cost of risk management – the pandemic had inadvertently meant that the Council had functioned without internal audit for the last year and, based on that, he asked whether 4.2 full-time equivalents was sensible and if the balance was right.  In response, the Head of Finance and Asset Management explained that the 4.2 full-time equivalents was a temporary measure in order to help with recovery and that would go back to the normal level of two going forward.  In his view, this was the right amount of resource to adequately inform the internal audit function and gain a sense of reassurance.  A Member expressed the view that the plan ought to include something environmental as the Council had been doing so much work in  ...  view the full minutes text for item 51.

To consider the Internal Audit Quality Assurance and Improvement Programme.

52.1          The report of the Chief Audit Executive (Head of Corporate Services), circulated at Pages No. 128-135, provided Members with the Quality Assurance and Improvement Programme.  Members were asked to consider the report.

52.2          The Internal Auditor advised that, in line with the requirements of the Public Sector Internal Audit Standards (PSIAS), the Chief Audit Executive must develop and maintain a Quality Assurance and Improvement Programme.  The proposed Programme, attached at Appendix 1 to the report, was split into two parts – the first section provided a summary of the Council’s internal audit process and assessed its efficiency and effectiveness and the second section set out the improvement programme for the next 12 months highlighting the areas where internal audit resources would be focused.  The programme must include both internal and external assessments and, as the last external assessment was undertaken in November 2017, a further assessment was due in 2022.  It was proposed this be carried out in the latter quarter of 2022/23 in order to allow the internal audit function to fully recover from redeployment to the Council’s COVID-19 response.

52.3          Accordingly, it was

RESOLVED           That the Internal Audit Quality Assurance and Improvement Programme be NOTED.

To consider the monitoring report on the Significant Governance Issues identified in the Annual Governance Statement and to review progress against the actions. 

53.1          The report of the Corporate Director, circulated at Pages No. 136-141, set out the Significant Governance Issues identified in the Council’s Annual Governance Statement and the action taken to address them.  Members were asked to consider the progress made against those actions.

53.2          Members were advised that three of the six actions had been completed and two had been started but the final action in relation to developing a new Local Code of Corporate Governance had been delayed due to resources being deployed to the COVID-19 response.  In relation to the governance arrangements for Community Infrastructure Levy, it was noted that the three Joint Core Strategy authorities were in the process of reviewing and confirming formal arrangements but assurance was provided that there was governance already in place, just not joint governance. 

53.3          Accordingly, it was

RESOLVED           That progress against the Significant Governance Issues identified in the Council’s Annual Governance Statement be NOTED.