Agenda and minutes

12.1          The Chair advised that the meeting was being held under the emergency provisions of the Coronavirus Act 2020 and, specifically, the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020.  The meeting was being broadcast live via the internet, it was not being recorded by the Council but, under the usual transparency rules, it may be being recorded by others. 

To receive apologies for absence and advise of any substitutions. 

13.1          Apologies for absence were received from Councillor L A Gerrard. There were no substitutions 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.

14.1          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. 

14.2          There were no declarations made on this occasion.

To approve the Minutes of the meeting held on 29 July 2020.

15.1          The Minutes of the meeting held on 29 July 2020, copies of which had been circulated, were approved as a correct record.  

To consider the Audit and Governance Committee Work Programme.  

16.1          Attention was drawn to the Audit and Governance Committee Work Programme, circulated at Pages No. 10-20, which Members were asked to consider.  

16.2          The Head of Corporate Services, advised that the meeting in November was an additional meeting, the main purpose of which was to approve the Statement of Accounts and associated documents; this was usually done in July but had been extended to November due to the COVID-19 pandemic. It was also noted that the annual update on the Council’s safeguarding arrangements and the food standards agency audit had both been moved to the December meeting due to the availability of resources in the team. A Member indicated that safeguarding was extremely important and asked for some assurance that the item would not be moved back further. In response, the Head of Corporate Services indicated that this was an annual update and so did not affect the actual operation of the safeguarding arrangements; however, he would do what he could to ensure it was considered at the meeting in December.

16.3          In response to a Member’s assumption that there would probably be some change in work programmes across the Council in the next three months due to the ever changing response to the pandemic, the Head of Corporate Services agreed that this may be the case. All work programmes were kept under review and some actions could change, for example, Internal Audit resources were likely to be redeployed in the event of a second national, or local, lockdown and, if that happened, the Internal Audit annual report and monitoring report would have to be delayed.

16.4          The Committee understood that Officers were doing all they could in these exceptional and unprecedented times. Accordingly, it was

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

To consider the external auditor’s progress report.  

17.1          Attention was drawn to Grant Thornton’s report, circulated at Pages No. 21-43, which set out the audit findings for 2019/20. Members were asked to consider the report.

17.2          The representative from Grant Thornton explained that the report highlighted the progress in delivering its responsibilities as the Council’s external auditors. The report also included a summary of emerging national issues that may be relevant to Tewkesbury Borough Council and a number of challenge questions in respect of those emerging issues which the Committee may wish to consider. Page No. 24, flagged up a change in that the audit plan, which had been due to be considered by Committee in March, had been shared electronically on 19 March, because the March meeting had been cancelled due to COVID-19. In addition, a paragraph had been included relating to the significant risks posed by COVID-19.

17.3          In terms of the completion of the Statement of Accounts, this deadline had been extended from 31 July to 30 November due to COVID-19 and the Council was on track to sign off by that date. The External Auditor’s detailed report findings would be submitted to the November Committee meeting. The value for money work had made good progress with most of the work completed; this would be reported in November. External Audit was awaiting an update of the Medium Term Financial Strategy for COVID-19. Referring to Page No. 25, the Grant Thornton representative advised that the National Audit Office consultation on a new Code of Audit Practice had concluded and, with the new Code having completed its approval process in Parliament, had come into force on 1 April 2020 for the 2020/21 audit year onwards. The most significant change under the new Code was the introduction of an Auditor’s Annual Report which would contain commentary on arrangements to secure value for money and any associated recommendations; further details would be communicated to the Committee within the next update. This meant that, from 2020/21 onwards, there would be a change in the value for money reporting; currently the main focus was on the conclusion but from next year, rather than a conclusion, there would be a set of recommendations which would form part of the annual report rather than being a separate audit findings report within the accounts work. Page No. 26 provided an update to the timings of the housing benefit audit which was usually completed by the end of November but had been extended to the end of January 2021 due to COVID-19.

17.4          In terms of audit fees, the impact of changes in respect of additional and more robust testing in financial reporting; improvements in financial reporting on items such as property, plant and equipment and pensions; and an increase in the complexity of local government financial transactions and reporting, had been reviewed in terms of both the cost and timing of audits. This had been discussed with the Section 151 Officer, including any proposed variations to the scale fee, and had also been  ...  view the full minutes text for item 17.

To consider the audit fee scale for 2020/21. 

18.1          The report of the Head of Finance and Asset Management, circulated at Pages No. 44-50, provided the fee scale for the audit in 2020/21 which the Committee was asked to note.  

18.2          The Committee was advised that, previously, this information had been provided in a letter from Grant Thornton, however, as part of its role, Public Sector Audit Appointments (PSAA) had agreed with the audit firms to inform individual organisations of their forthcoming audit fee rather than requiring the firms to communicate separately. Tewkesbury Borough Council’s fee scale for 2020/21 was set at the same level as for 2019/20. Referring to the information provided during the previous Agenda item about the Redmond Review recommendations, the Head of Finance and Asset Management indicated that the review had recommended a 25-30% increase in fees paid by organisations to audit firms; this would be decided by the Ministry for Housing, Communities and Local Government so the Council awaited that outcome as well as information on whether there would be any additional funding for local authorities to cover any increase in fees.

18.3          Accordingly, it was

                 RESOLVED           That the fee scale for the 2020/21 audit be NOTED.

To recommend to the Executive Committee that the Regulation of Investigatory Powers Act 2000 Surveillance and Covert Human Intelligence Source Policy and the Investigatory Powers Act 2016 Acquisition of Communications Data Policy be approved and that authority be delegated to the Borough Solicitor to approve future minor amendments in consultation with the Counter Fraud Manager and the Lead Member for Corporate Governance.

19.1          The report of the Borough Solicitor, circulated at Pages No. 51-101, provided the Committee with a revised Regulation of Investigatory Powers Act 2000 Surveillance and Covert Human Intelligence Source Policy; and a new Investigatory Powers Act 2016 Acquisition of Communications Data Policy. Members were asked to recommend the policies to the Executive Committee for approval and to authorise the Borough Solicitor to approve future minor amendments in consultation with the Counter Fraud Unit Manager and the Lead Member for Corporate Governance.

19.2          The Counter Fraud Unit Manager advised that the local authority was required to have effective policies to enable Officers to gather intelligence and conduct surveillance in line with the law. The policies appended to the report illustrated the authority’s consideration of necessity, proportionality and public interest when deciding on surveillance activity and requests for communication data, as well as demonstrating openness and transparency for its customers. The report also provided an update in relation to the authority’s existing authorisation arrangements and the outcome of the recent inspection by the Investigatory Powers Commissioner’s Office. In future, the Counter Fraud Unit would be responsible for the annual update, any policy refresh, and inspections.

19.3          During the discussion which ensued, a Member questioned how many times the powers had been used. In response, the Counter Fraud Unit Manager explained that the numbers were minimal, but she could email the actual figures to Members following the meeting. In terms of Member oversight, this was not required as it was a criminal investigation process and the integrity of the case had to be preserved; however, once the case was completed, the details would be included in the annual report. Another Member felt that some of the wording in the policies was quite outdated and asked that this be addressed in future. In response, the Counter Fraud Unit Manager indicated that she had simply lifted some of the paragraphs from the legislation, but she would change that in future to ensure the wording was more modern i.e. the use of ‘his/her’ or ‘their’ instead of ‘his’.

19.4          Accordingly, it was

                 RESOLVED           That it be RECOMMENDED TO EXECUTIVE COMMITTEE:

1.     That he Regulation of Investigatory Powers Act 2000 Surveillance and Covert Human Intelligence Source Policy, as attached to the report at Appendix 1, be APPROVED.

2.     That the Investigatory Powers Act 2016 Acquisition of Communications Data Policy, as attached to the report at Appendix 2, be APPROVED

3.     That the Borough Solicitor be authorised to approve future minor amendments in consultation with the Counter Fraud Unit Manager and the Lead Member for Corporate Governance.

To consider the progress made against the implementation of the recommendations identified in the audit of the Council’s Discretionary Housing Payment Policy. 

20.1          The report of the Head of Corporate Services, circulated at Pages No. 102-109, provided an update on the progress made on implementing audit recommendations following a review of Discretionary Housing Payments and an unsatisfactory audit opinion.

20.2          The Committee was advised that Discretionary Housing Payments were awarded when a local authority considered that a claimant required further financial assistance towards housing costs and was entitled to either Housing Benefit or Universal Credit towards rental liability. The payments scheme was funded by the government and the Council could top up the funding up to an additional 150% if it so wished. The allocation for the 2020/21 financial year was £142,189. In February 2020, an audit had been undertaken by the Council’s Internal Audit Team at the request of the Revenues and Benefits Manager to ensure that awards were being made consistently and only to those demonstrating a real need for financial support. The audit had resulted in an unsatisfactory audit opinion and that report had been presented to the Committee in July 2020. To reassure Members, it was agreed that a report would be brought back to the next meeting with an update on progress against the recommendations.

20.3          The Revenues and Benefits Manager advised that, unfortunately, the COVID-19 pandemic had had a significant impact on the Revenues and Benefits team which meant not as much progress had been made on implementation of the recommendations as would have been the case in normal times. The COVID-19 pandemic had also meant that the team had to work around some of the recommendations due to being unable to see residents face to face or accept paper documents in support of applications. In addition, further work needed to be undertaken in case management between benefits and housing to ensure residents were being moved to more suitable accommodation with reduced reliance on Discretionary Housing Payments as these were meant to provide temporary support. The Revenues and Benefits work plan for quarter 2 included these tasks.

20.4          Attention was drawn to Paragraph 2.0 of the report which set out the audit recommendations and the progress made to date against each. In terms of recommendation 1, a checklist had been developed to support the collection and assessment of Discretionary Housing Payment information and had been used to assess every application; this had meant that payments were not being made in as many circumstances as previously. In respect of recommendation 2, the policy had been reviewed and non-essential items of expenditure such as alcohol, cigarettes, newspapers and magazines were no longer taken into consideration when assessing an application. Recommendation 3 was that consideration should be given to introducing performance reporting in consultation with the Lead Member for Finance and Asset Management, however, this had been delayed due to the pandemic but it was intended that a meeting would be set up with the Lead Member in October to agree the performance methodology moving forward. Expenditure against the budget was routinely monitored in line with good practice and,  ...  view the full minutes text for item 20.

To consider the requirements of the business grants post payment assurance framework and acknowledge the impact on the Internal Audit plan

21.1          The report of the Head of Finance and Asset Management, circulated at Pages No. 110-113, sought to raise awareness of the significant ongoing work associated with the business grant scheme and the impact that this would have on the internal audit plan as staff resources were redeployed to meet the requirement. The Committee was asked to note the requirements of the business grants post payment assurance framework and acknowledge the impact on the internal audit plan.

21.2          The Head of Finance and Asset Management explained that, over the first five months of the financial year, the Council had been responsible for administering a significant amount of business grants as part of the response measures activated to meet the impact of the coronavirus pandemic. The business grant schemes had now closed to new applications but there remained a significant piece of work to ensure all applicants were compliant with all parameters of the various grant schemes; whilst the Council carried out a number of relevant checks prior to payments of grants, the framework set out by the government required further checks to be made. The resources necessary to undertake those checks had been assessed and significant additional resources would be needed to fulfil the requirement. When discussing the deployment of resources, the Management Team had agreed that the benefits of retaining one full-time equivalent from the Internal Audit team to oversee this important piece of work outweighed the risk to the internal audit plan in the second half of the year.

21.3          The Committee was advised that, in response to lockdown measures, the government had introduced a range of support measures for businesses affected by the lockdown. Of the financial measures introduced, local government was specifically responsible for the administration of two of them; the award of business rates relief for retail premises and the award of a range of grants targeted at specific sectors within the business community. To date, the Council had awarded over £10.3 million of additional business rates relief in the current financial year. A range of business grants schemes had been administered by the Council during the year including: Retail, Hospitality and Leisure Grants; Small Business Grants; and Discretionary Grants. All those schemes closed to new applications on 28 August although there remained a few grants being processed within the scheme - to date £17,010,000 had been paid to 1,461 grant applications and £862,980 paid to 87 discretionary grant applications. Significant resources had been redeployed from a number of services across the Council to meet the demand but, as the schemes had drawn to a close, the majority of those resources had been released with only a few key individuals retained to complete the process of grant payments. The post assurance phase would now have to begin, and this would, again, require significant resources to ensure it was delivered within the scheme requirements. The work undertaken upfront had reduced the post assurance work required; however, there would still be a significant amount of work going  ...  view the full minutes text for item 21.

To approve the Internal Audit Six Month Plan 2020/21 (October 2020-March 2021). 

22.1          The report of the Head of Corporate Services, circulated at Pages No. 114-118, set out the Internal Audit Six Month Plan 2020/21 which Members were asked to approve.

22.2          The Committee was advised that the Public Sector Internal Audit Standards REF 2010 (Planning), required that the Chief Audit Executive be responsible for developing a risk-based plan, and REF 2030 (Resource Management) required the Chief Audit Executive must ensure that Internal Audit resources were appropriate, sufficient and effectively deployed to achieve the plan. In addition, the Terms of Reference of the Audit and Governance Committee required Members to consider a summary of proposed internal audit activity.  

22.3          The Head of Corporate Services explained that, in accordance with the previous Agenda item, moving forward there would only be one full time equivalent Internal Auditor (made up of two part-time Officers) so, the six month plan was caveated that it should be achievable unless there was a second national, or local lockdown meaning those resources needed to be diverted into response mode. The plan included 80 audit days net which allowed for weekends, bank holidays, training, sickness and leave.  There were a number of items in the plan which had been included following discussion with Officers: creditors – a back to basics audit to ensure authorisation controls remained in place and expenditure was justified; sundry debtors – to ensure debts were raised in all areas; business rates and the Local Council Tax Housing Allowance Scheme – to check validity of business rates accounts and payments made to those receiving Council Tax Reduction Scheme payments; and S106 Agreements – to ensure there was a robust scheme for administration of S106 Agreements. The Head of Corporate Services indicated that he would ensure the Committee was kept updated of any changes.

22.4          Accordingly, it was

                 RESOLVED           That the Internal Audit Six Monthly Plan 2020/21 (October to                                    March), as detailed in Appendix 1 to the report, be                                                   APPROVED.

To approve the Audit and Governance Committee Annual Report 2019/20. 

23.1          The report of the Chief Audit Executive, circulated at Pages No. 119-132, attached the Audit and Governance Committee’s Annual Report 2019/20 which Members were asked to approve. The report would then be submitted to Council as required by the Constitution.  

23.2          The Committee was advised that the production of an annual report was good practice and helped demonstrate the broad coverage of activities that the Committee had been informed of, reviewed and challenged during the year. The Head of Corporate Services expressed the view that the report captured the activities of the Committee, but the comments of the Committee were welcomed. Any amendments felt necessary would be updated to Members through the Chair’s presentation of the report at the Council meeting.

23.3          It was

                 RESOLVED           That the Audit and Governance Committee’s Annual Report                                2019/20 be APPROVED.