To confirm the minutes of the meeting held on 2 February 2023.

The Minutes of the meeting held on 2 February 2023 were confirmed as a correct record and signed by the Chairman.

None.

To receive apologies for absence.

An apology for absence was received from Councillor Oliver.

To note whether the Chairman proposes to accept any item as urgent business, pursuant to Section 100(B)(4)(b) of the Local Government Act 1972.

None.

The duties to register, disclose and not to participate for the entire consideration of the matter, in respect of any matter in which a Member has a disclosable pecuniary interest are set out in Chapter 7 of the Localism Act 2011.  Members are also required to withdraw from the meeting room as stated in the Standing Orders of this Council.

None declared.

To note the names of any non-members wishing to address the meeting.

The Chairman welcomed Councillor Phil Cowen, the Executive Member for Finance, Revenue & Benefits and Councillor Webb, the Executive Member for Customer & Corporate Services to the meeting.  He also welcomed Councillor Richmond who was in attendance to observe the meeting.

To note if there are any training issues/ requests.

The Chairman thanked those Members for attending the audit training which had been held prior to this meeting, hosted by Faye Haywood, the Head of Internal Audit.

The Vice-Chairman, Councillor Kybird mentioned the forthcoming governance training, which was being held on Tuesday, 27 June, hosted by Rory Ringer, the Democratic Services Manager and the Legal Services Manager, Sarah Wolstenholme-Smy.

Report of Ryan Pack, Innovation & Change Business Partner.

Alison Webb, the Executive Member for Customer & Corporate Services introduced the report.

She was delighted to bring the Quarter 1 Risk report to this meeting and welcomed the new Members to the Committee.  She felt that it would be useful to explain what the risk report dealt with. The risks included within the report were what the Council defined as strategic risks and were risks that had an impact on the delivery of the Corporate Plan and were brought to this Committee to ensure that everyone agreed that these risks were being managed correctly.

In terms of the risks themselves, this had been a static period for the Council, with the scores not being changed since the Committee last met in February 2023. This was not saying that such work was not being carried out to mitigate these risks, but the work was not yet at a stage of impact to bring the risks down. An example of this was the joint venture this Council formed part of in respect of Nutrient Neutrality where a great deal of work had been carried out in getting this venture set up but was not yet at the stage where this risk could be mitigated further.

Ryan Pack, the Innovations & Change Business Partner then covered some of the more technical aspects of the report.

Although there had been some slight changes to some of the risks in terms of key risk indicators and key control indicators which was just an additional way for this Committee to measure whether the risks were being scored at the correct level, there had not been a great deal of movement in this quarter.

Councillor Clarke said that he had looked through Qtr1 and one matter of concern was the financial market going forward in terms of temporary accommodation and the increased demand in housing services.  He was aware that some matters were going to be outside of this Council’s control but assumed that the Senior Management Team would be keeping a close watch on such matters in terms of whether resources in that service area should be increased.

Members were informed that this was classed as a long-term risk particularly the housing demand as this was a risk that the Council could not control; however, the temporary accommodation was a little brighter to an extent as the Council had greater control by purchasing additional units that allowed this authority to claim back some of the housing benefit for the people who moved into those units so the cost to the Council was less.

Alison Chubbock, the Assistant Director of Finance & S151 Officer explained that in terms of the financial element, this Council had invested in a number of dwellings and the budget for temporary accommodation had been increased for this year.  Also, some additional Government funding had just recently been received to support additional resource in this service area and this would be closely monitored.

The Chairman felt that the key concern was the reduction in rental  ...  view the full minutes text for item 25/23

Report of Faye Haywood, Head of Internal Audit.

Faye Haywood, the Head of Internal Audit presented the report.

Members had been provided with an overview of this report at the training session that took place prior to the meeting.

Referring to section 2.1 on page 42 of the agenda pack, this highlighted two significant changes since the Audit Plan’s approval in March 2022.  Two audits had been reprofiled and the nature of those changes and the justification had been included.

In terms of the progress update, all of the work that was in the revised Plan had now been concluded and two reports were currently in draft stage. 

The Head of Internal Audit was pleased to report that at section 4.4, the Vulnerability Strategy report had now been finalised and was no longer in draft.

At section 4.7, two position statements had been issued in this period in terms of Procurement and Contract Management Consortium Arrangements and Sustainability and Climate Change both had several suggested improvements.  In regard to the latter evidence had been provided but climate change was a developing area therefore an advisory had been given at this stage.

At section 4.8, the Anglian Revenue Partnership Audits were normally concluded in quarter 4. ARP auditors had carried out this work not TIAA as before and the results of this audit had been included in each report in bullet point form and any of these recommendations would be followed up and discussed at the ARP Operational Improvement Board (OIB).

The appendices highlighted any actions that were now overdue and the reasoning behind these delays had been included.

Attention was drawn to section 5.5 where a significant priority 3 recommendation remained unsolved from 2019/20.  This was quite an historical action and Officers had been asked to provide this Committee with an update and a new timeframe and further information on this matter would be provided in due course.

The full plan had been provided on pages 48 and 49 of the agenda pack that included the gradings for each piece of work, and Appendix 2 provided the executive summaries for each of the audits that had been concluded in this period.

Councillor Clarke referred to section 4.4 of the report.  Five reports had been given reasonable assurance and he wanted to know if these had been moved up or down.  Members were directed to the later Internal Audit Opinion Report at agenda item 10 where at Appendix 2 of this report an assurance chart could be found that provided the previous and current gradings.

The Vice-Chairman the Business Continuity and Emergency Planning under section 2.1 of the report and asked if this was just for Breckland Council or did this authority have a wider remit within the district.  Members were informed that this was in respect of a Breckland Council Officer.

Also, on page 46 of the agenda pack, under asset management, he was aware that the asset register had been subject to a number of Freedom of Information (FOI) requests in terms of the lack of response.  ...  view the full minutes text for item 26/23

Report of Faye Haywood, Head of Internal Audit.

The Head of Internal Audit presented the report that summarised all of the internal audit work that had been carried out for the year 2022/23 ending 31 March 2023.

She was pleased to inform Members that the Governance Risk Management and Control Opinion for Breckland Council this year was reasonable which was positive, and overall, the areas that had been reviewed, the health of the control framework was positive. 

The background provided an idea as to why this report had to be produced and the key sections were highlighted.

Under section 2.2, the opinion itself, 17 audits had been carried out, of which three areas had been given substantial assurance, the highest grading available.  There were two areas that were currently indicating as a limited assurance, and members were provided with an overview of these.  Significant weaknesses that had been indicated in relation to Procurement and Contract Management, and Private Sector Housing. In both cases, resourcing challenges had been highlighted as a root cause. It was reported that both teams were aware of the risks highlighted and were beginning to resolve the issues accordingly. 

A summary of internal audit work had been provided in section 3.3 of the report and section 3.4 provided the follow up of management action. Section 3.5 of the report was also highlighted and at section 5.1.3, an external assessment had been carried out in October 2022 by the Chartered Institute of Internal Auditors (IIA) and the Head of Internal Audit was pleased to announce that Eastern Internal Audit Services (EIAS) received good feedback that showed that Internal Audit consortium was in good health. The Internal Audit service and TIAA contract was benchmarked against several performance indications as agreed by this Committee.  There were no concerns raised in terms of the quality, but the timeliness of the work was a concern and was considered unacceptable.

Appendix 2 of the report provided the assurances as mentioned in agenda item 9.

Councillor Clarke referred to section 2.2, the opinion itself where two areas of limited assurance had been highlighted.  He had noted that there was a commitment in progressing those and felt that it would helpful if a timeline could be included of when these could be completed.  Also, in respect of Private Sector Housing, there were issues in his Ward and the Overview & Scrutiny Commission (O&SC) had agreed that all housing providers would be attending the next O&SC meeting to expand on such issues. 

The Head of Internal Audit explained that a report could be provided in due course, management had agreed the timeframe and progress would continue to be monitored and she was comfortable with the Team’s approach.

The Vice-Chairman had noticed that over the past 5 years there were two limited assurances under Procurement and Contract Management and felt that more work needed to be done on this and in terms of private sector housing he understood that very recently Breckland Council had fined a landlord for non-compliance and felt that a further  ...  view the full minutes text for item 27/23

Report of the External Auditor, Mark Hodgson, E&Y.

In the absence of the External Auditors, Alison Chubbock, the Assistant Director of Finance & S151 Officer presented the Auditor’s Annual Report.

A number of the key messages were highlighted, and any questions would be conveyed back to Mark Hodgson, the External Auditor.

It had been another good audit, with few issues of substance to report.  The time had been hampered by national issues around Infrastructure and Pension Triennial valuations that took time to resolve nationally and then locally.  Great support from the Finance Team had been provided during the audit, the VFM commentary had been included within this report (Section 3 and appendix A) that explained how the auditors were satisfied that the Council had adequate arrangements in place during the year under review.

Attention would now be turned to the 2022/23 audits that were now in line with the correspondence that was sent to all Chief Finance Officers subject to any announcements made by DLUC. 

From a Breckland perspective, the accounts had been reviewed at the last Audit Committee meeting with delegated approval to sign off being provided.  Ernst & Young (EY) were thanked for changing their timetabling by finalising the capital and asset elements of the audit before 31st March 2023 that allowed the Council to close off the financial systems for the current year without any delays.

As could be seen in the EY comments, there were some national delays such as the Pension review and then delayed again slightly due to elections.  However, the Assistant Director of Finance & S151 Officer was pleased that the accounts had all been signed off before this meeting, meaning Breckland was one of only around 20% of English Councils who have had 2021-22 signed off.

In reference to the 2022-23 audits, due to the current backlogs in 2021-22 and previous years, the 2022-23 audits would not start before November 2023 at the earliest.  EY would be communicating with Breckland Council during the summer with a better indication of timing.

The Vice-Chairman felt that the Finance Team should be congratulated for an early and a top 20 result but there was one line within the report that said that the Council should not be complacent as far as efficiency savings were concerned which he felt was slightly unusual wording for an audit report.

The Assistant Director of Finance & S151 Officer agreed that this Council should not be complacent and as part of the financial reporting to Cabinet and the Overview & Scrutiny Commission such matters would continue to report on how this was being achieved against the Council’s efficiency targets, as this would be key to balancing the budget in future.

The Chairman felt that the wording in the auditor’s report suggested that Breckland Council was complacent, but he would be interested to see how this had been measured.

The report was otherwise noted.

Report of Matthew Fernandez-Graham, Accountancy Manager & Deputy S151 Officer.

Matthew Fernandez-Graham, the Accountancy Manager, presented the report.

The unaudited Statement of Accounts had been signed and published on 31 May 2023, a good result, as only a third of councils nationally had managed to meet this statutory deadline.

The narrative on page 115 of the agenda pack provided clear information on a number of statements in terms of the Council’s finances.  As far as performance was concerned, the general fund balance had been reduced by £157k this year which was still above the minimal balance that had been set.  The balance sheet illustrated that there had been a very large change in the pension liability, in terms of a very large reduction of £36m due to the triennial valuation which was in common with other councils in the Norfolk County Council scheme.  This did not have an immediate impact on the Council’s finances, but it was good to know that the scheme was more likely to be more affordable in the long term.

David Fowler drew attention to pages 106, 107 and 108 as he had noticed that there was some text missing in the boxes.  The Assistant Director of Finance apologised for not picking this up before, but it was due to a system error in terms of when the reports were collated; however, the version on the website was formatted correctly.

Councillor Monument endorsed the error but what it actually left Members with was a mystery in each of those cases.

The Vice-Chairman stated that overall, the reasons that were beyond the Council’s control was that it had vastly overspent on housing costs but had been lucky to get this offset by having cash reserves in which it had achieved unexpectedly.

Councillor Cowen stated that most people were aware that when interest rates increased it became a burden but meant that everyone received a better return on investments that worked in the Council’s favour in this case. 

The Chairman stated that this Council had a very small amount of borrowing which was a bonus for this authority.

RESOLVED that the un-audited statement of Accounts and the draft Annual Governance Statement for 2022-23 be noted.

Report of Alison Chubbock, Assistant Director of Finance & S151 Officer.

The Accountancy Manager presented the report.

In all cases Breckland Council had complied with the relevant requirements from CIPFA.  One of the key issues to report was that the Council had moved into a position where it was borrowing internally and using some of its investment cash for capital which was a cheaper way of financing the capital programme than borrowing externally.

Income on investments had increased substantially this year, the highest it had been for over a decade given how interest rates had gone up and these were expected to increase even further.

RECOMMEND to Full Council that:

1.    the actual 2022/23 prudential indicators be approved; and

2.    the Treasury Management Annual Report for 2022/23 at Appendix B and Appendix C of the report be noted.

A copy of the Committee’s work programme is attached.  The Committee is asked to consider whether any additions, deletions or amendments to the programme are required.

The Vice-Chairman queried the forthcoming risk reports.  Members were informed that this would be rectified in due course and the Risk Management Policy would be reported to the September meeting.

The work programme was otherwise noted.

To note the arrangements for the next meeting to be held on Thursday, 28 September 2023 at 10am in the Anglia Room.

The Chairman and Members are asked to consider a request from the Head of Internal Audit to move the Governance & Audit Committee meeting scheduled for the 8^th February 2024 to a later date to either the 15^th or 29^th February 2024. 

The arrangements for the next meeting on Thursday, 28 September 2023 at 10am in the Anglia Room were noted.