Agenda and minutes

Venue: Norfolk Room, Conference Suite, Elizabeth House, Dereham

Contact: Committee Services  01362 656870

No. Item


Minutes (Agenda item 1) pdf icon PDF 87 KB

To confirm the minutes of the meeting held on 12 December 2014.


Subject to an amendment to Minute No. 70/14 (6th paragraph, 1st sentence), to read: “Mr Ludlow had noticed that the test environment for the BACS changes were historically largely cosmetic and in future this could change”, the Minutes of the meeting held on 12 December 2014 were confirmed as a correct record and signed by the Chairman.



Apologies (Agenda item 2)

To receive apologies for absence.


Councillors W. Nunn, C. Bowes and M. Nairn.



Urgent Business (Agenda item 3)

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.


The Overview & Scrutiny Commission (O&SC) had recently appointed three of its Members to a LABV Task & Finish Group (T&F).  The T&F Group had been set up to receive and review the details of the financial elements of the LABV proposal on behalf of Full Council.  The Group would report its findings to a Special Overview & Scrutiny Commission on 17 March 2015 prior to the Full Council meeting on 26 March 2015. 


It had been proposed that the T&F Group be created with a membership of six, three from O&SC and 3 from the Audit Committee.  Due to the tight timescales, the first meeting of the Group had already been arranged for Wednesday, 4 March 2015 at 9.30am in the Anglia Room; however, an informal Briefing would be held prior to that meeting but the date for this had not yet been agreed.


The Chairman proposed that he, together with William Nunn and Tim Ludlow should be appointed to the Group.  Members were informed that only Elected Members could be appointed to the T&F Group.  The Chairman then proposed that Cllr Bill Borrett be appointed to the Group.


It was agreed that the following Members be appointed to the LABV Task & Finish Group:


  • Cllr Cliff Jordan
  • Cllr William Nunn
  • Cllr Bill Borrett; and
  • Cllr Charles Carter (as substitute)


The Chairman said that he would inform Cllr Borrett of his appointment.



Declaration of Interests (Agenda item 4)

Members are reminded that under the Code of Conduct they are not to participate and must leave the room, for the whole of an agenda item to which they have a Disclosable Pecuniary Interest. 


In the interests of transparency, Members may also wish to declare any other interests they have in relation to an agenda item, that support the Nolan principles detailed within the Code of Conduct.





Non-members wishing to address the meeting (Agenda item 5)

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





Quarterly Update - Risk Management (Agenda item 6) pdf icon PDF 387 KB

Report of the Executive Director for Commissioning & Governance.


The Business Intelligence Officer presented the quarterly risk report for Quarter 3.  The report was in a slightly different format to the previous quarter as inherent risks had been included as requested.


There was one inherent high risk that remained which was in relation to staff recruitment and retention at all levels within both organisations.  No changes had been identified.  Four risks had decreased following a detailed review; however, there was one new risk which was in relation to a communication breakdown regarding taxi licensing.  Measures and mitigations plans were being put in place to prevent critical breakdowns in communication between this authority, Norfolk County Council and other bordering local authorities.


Mr Ludlow raised concern about the current controls in place for SR-04 in relation to the introduction of the Local Council Tax Support Scheme.  Members were informed that by actually reviewing the scheme, it had been recognised that after a year of being in operation the Council had been overly prudent and had actually collected more council tax than expected so the perception of risk had decreased.  Mr Ludlow thought that it would have been helpful to have this reflected in the comments.  Members were informed that the Medium Term Plan and the Business Rates Retention Scheme had a similar response.


Referring to the Operational Risks, the Business Intelligence Officer highlighted that there were 2 existing high risks, 2 decreased risks, one new risk plus two increased risks which were in relation to Corporate Improvement and Performance and Housing.  Mr Ludlow asked if there was any reason why AP-OR 08 had not been achieved.  The Business Intelligence Officer could not answer the question but would provide this information after the meeting.  Mr Stevens queried the current controls in place for the new risk EH-OR 05 and asked for more details on the IDenticom card.  The Business Intelligence Officer said that he was not familiar with this card and would follow this request up after the meeting.  The Executive Director of Place felt that Officers needed to make the report clearer so that Members could make sense of the information.  Referring to the existing risk AP-OR 08, Cllr Kybird asked if the risk was in relation to S106 monies being clawed back by the developer if not spent.  The Executive Director of Place was not sure if this was the case but would check and report back.


Referring to page 19 of the agenda under IT-OR 02, Mr Ludlow raised concerns about the 2012 target date under the current controls.  The Internal Audit Consortium Manager said that she had spoken to ICT about this hardware and software solution (mirror view) being implemented and it had been advised that the cable was not big enough to take all the information across and was being upgraded.  An exact replica site would be available at the Thetford site in March 2015.


The report was otherwise noted.



Local Government Sector Update (Agenda item 7)

External Audit, Ernst & Young.


Rob Murray, Director for Ernst & Young said that there was a quarterly sector update which he would ask the Senior Committee Officer to email to the Audit Committee Members after the meeting.



Certification of Claims and Returns Annual Report 2013-14 (Agenda item 8) pdf icon PDF 2 MB

External Audit, Ernst & Young.


The Assistant Manager for Ernst & Young presented the Annual Report and provided Members with a summary of their work on Breckland Council’s 2013-14 claims.


One claim had been certified in 2013-14 in relation to Housing Benefits and Members’ attention was drawn to the summary table on page 28 of the agenda.  The Department for Work and Pensions (DWP) would come back to the authority if any follow up work was required.  Officers were currently looking at the errors found and were seeking to establish the extent of any similar errors that might exist in the current financial year.


Other areas identified had been highlighted in the qualification letter.


In response to a concern about how bad the Housing Benefit errors were, Members were informed that they were not significant.  The Executive Director of Place pointed to another indicator that gave Members assurance which was in relation to performance thresholds and advised that the Anglia Revenues Partnership was one of the best in terms of error rate.


The report was noted.



2014/15 Audit Plan (Agenda item 9) pdf icon PDF 4 MB

External Audit, Ernst & Young.


Rob Murray, Director for Ernst & Young presented the 2014/15 Audit Plan.  The Plan summarised the initial assessment of the key risks that drove the development of an effective audit for the Council and outlined the planned audit strategy in response to those risks.


The Audit Plan covered two main areas, the Financial Statement and arrangements for securing economy, efficiency and effectiveness.


The Chairman asked Mr Murray when he would personally be rotating out of the contract.  Members’ attention was drawn to page 111 of the agenda and it was noted that he would be rotating the work to one of his colleague director’s in September/October of this year.


The Audit Plan 2014/15 was noted.



Treasury Management Policy & Strategy 2015-16 (Agenda item 10) pdf icon PDF 75 KB

Report of the Executive Director of Place.

Additional documents:


The Finance Manager presented the report. 


Appendix A of the report outlined the recommendations to Full Council.


Mr Ludlow had tendered questions and observations on various matters in relation to the Treasury Management Policy & Strategy and the report would be amended accordingly.


A summary of the main changes and key issues were highlighted as follows:


·               No change to the MRP policy


·               No change to counterparty limits.


·               Due to the timing of writing the report, all information on the Capital Programme had been based on the budget being presented to Cabinet on 24th February 2015.


·               Following a successful retendering exercise involving all the Norfolk Authorities including the County Council, Breckland Council went live with Barclays Bank on 3rd February 2015.  The Council had an investment account with Barclays of up to £5m and as a result of changing banks, on any one day the Council could hold balances with Barclays in excess of the £5m limit per counterparty that was allowed.  In accordance with the Treasury Management Policy, balances were managed on a pragmatic basis.   Whilst interest rates were low, it was more cost effective to leave balances in Barclays rather than incur bank charges to transfer funds to an alternative bank that earns less interest than the bank charge.  Therefore, the Council could maintain its Barclays investment plus hold reasonable balances for operational purposes.  This arrangement would be kept under review and should the credit rating of Barclays drop, this could lead to a more cautious approach as had been adopted with the Co-op where balances were kept to a minimum.


The Council was due to consider a report on the LABV project on 26th March 2015 that could have an impact on the Treasury Policy or Strategy documents.  Any changes to this Treasury Policy resulting from the LABV report would be included in the report to Council 26th March 2015 and the documents would be updated accordingly.


Mr Ludlow asked if the Policy being agreed was subject to approval of the LABV project.  The Finance Manager explained that this had to be included in the report at this time as it would not be coming back to the Audit Committee.


Referring to page 38 of the agenda, Mr Ludlow asked if the date reflected under the MRP Policy Statement was a statutory date and related to PFI.  Members were informed that this wording would be changed before Full Council.


Mr Ludlow also asked for the word ‘marginally’ to be explained in terms of counterparty ratings highlighted in the second paragraph on page 46 of the agenda.  The Finance Manager advised that this was how Capita Assets Services set its colour coding model which they could change –the word ‘marginally’ related to the small difference between an AAA counterparty rating and an AAA minus counterparty rating.


The Executive Director of Place mentioned the investment returns that had recently been announced by the Bank of England and asked the Finance Manager if the updated information would be available  ...  view the full minutes text for item 10/15


Strategic and Annual Internal Audit Plans 2015/16 (Agenda item 11) pdf icon PDF 59 KB

Report of the Internal Audit Consortium Manager.

Additional documents:


The Internal Audit Consortium Manager presented the report and provided Members with an overview of the stages followed prior to the formulation of the Strategic Internal Audit Plan for 2015/16 to 2017/18 and the Annual Audit Plan for 2015/16.  The Annual Internal Audit Plan would serve as the work programme for the Council’s Internal Audit Services Contractor, TIAA Ltd.  It would also provide the basis for the Annual Audit Opinion on the overall adequacy and effectiveness of Breckland Council’s framework of governance, risk management and control.


The report Strategic and Annual Internal Audit Plans contained:


o              an update on the minor amendments made to the Internal Audit Charter;

o              the Internal Audit Strategy, which was  a strategic high level statement on how the internal audit service would be delivered and developed in accordance with the Charter and how it linked to the organisational objectives and priorities;

o              the Strategic Internal Audit Plan, which detailed the plan of work for the next 3 financial years;

o              the Annual Internal Audit Plan, which detailed the timing and the purpose of each audit agreed for inclusion in 2015/16; and

o              provided the Committee with the performance measures against which the new contractor would be monitored.


The Internal Audit Charter would be brought back to the Audit Committee every two years for review and reviewed by the Internal Audit Consortium Manager annually.  The only change made for the 2015/16 year was the introduction of formal exit meetings which would ensure that a robust and thorough discussion was held on the conclusion of the review.  This would ensure that any actions proposed by management to implement recommendations would ensure that the risks were appropriately mitigated.  The Audit Charter would be further reviewed and refreshed once the new contract had been in operation for 6 months and an updated Audit Charter would be presented to the Committee with the audit plans for 2016/17.  As part of the review of the Audit Charter, the Code of Ethics would be reviewed by the Internal Audit Consortium Manager and no longer reported to this Committee as it was an internal management process.


The Internal Audit Strategy set out how the internal audit service had been developed in accordance with the Charter and how it linked to the organisational objectives and priorities.


Referring to the Strategic Internal Audit Plan, Members were informed that the IT audits were currently in draft and had not been finalised due to the new contract not starting until April 2015.  The Internal Audit Consortium Manager advised that she would be meeting with the new IT Audit Manager (TIAA) and staff at Breckland Council and Norfolk County Council to determine the IT audits and an update would be provided to the Audit Committee later in the year.


The performance management audit had been carried forward due to the many changes in that area. 


The new Internal Audit Services contract included a suite of key performance indicators against which the new contractor would be reviewed on a  ...  view the full minutes text for item 11/15


Update on the Implementation of Audit Recommendations (Agenda item 12)

Verbal update by the Internal Audit Consortium Manager.


The Internal Audit Consortium Manager provided Members with a positive update in the implementation of Audit recommendations.  A whole raft of recommendations had been closed down and 2 final reports had been issued recently with only 2 low recommendations being raised.   The year-end follow up would be completed by the new contractor in April.  It was reported that Management had positively responded to the implementing audit recommendations and she believed that the Council was in a very good positive position.  Many of the old recommendations had been cleared down and as Breckland Council was her trial site for Risk Based Auditing she could not be happier.


The Chairman was very pleased to hear this news.



Work Programme (Agenda item 13) pdf icon PDF 56 KB

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.


A revised Work Programme was circulated.  It had been proposed that the meeting on 12 June 2015 be cancelled to allow Ernst & Young time to audit the draft Statement of Accounts on 26 June 2015; this would be followed by a further meeting on 31 July 2015 to approve the Accounts.  All reports originally scheduled for the 12 June would be moved to the 26 June 2015 meeting.


The revised meeting dates were agreed.


Mr Keith Stevens asked what had happened to the Intellectual Property Working Group.  He was puzzled why this Group had dropped off the radar and could not see any reason why it had been so important then and not now. The Executive Director of Place said that she had been aware of this Group; however, clarity had now been received around the Council’s contractual position with South Holland District Council.  Mr Stevens explained that the key driver had been in relation to Breckland Training Services (BTS).  The Chairman agreed, it was the commercial aspect of the Council that had been the main concern and he mentioned the Anglia Revenues Partnership.  In response to the latter, Members were informed that as there were 4 local authorities protecting Intellectual Property Rights, issues around transparency would be very difficult; however, there was no reason why this Group should not be re-instated.  Councillor Kybird felt that something sensible should be put in place to prevent other organisations stealing our ideas.  The Executive Director of Place felt that BTS would be a good perspective to look at and suggested that the Assistant Director of Community be asked to work with Members on this matter.  However, if Members felt that it was a priority, due to workload, a resource would need to be allocated to it.  She also needed to know exactly what Members wanted from it.


It was agreed that the Intellectual Property Working Group should be added to the meeting on 31 July 2015.


Councillor Canham felt that there should be a training programme scheduled in for new Audit Committee Members following the Election. The Internal Audit Consortium Manager said that induction training would be provided.



Next Meeting (Agenda item 14)

To note the arrangements for the next meeting to be held on Friday, 12 June 2015 at 10.00am in the Norfolk Room.


Members are asked to note that since the Audit Committee meeting and following a request by the Internal Audit Consortium Manager, the 12 June meeting has been re-instated and the 26 June meeting has been cancelled.  The meeting on the 31 July 2015 will still go ahead as planned.


The Chairman announced that he would not be standing for re-election in May and therefore, this was his last meeting as Chairman of the Audit Committee. He had enjoyed the meetings very much and he thanked everyone for their support.  Councillor Kybird thanked him for Chairing this Committee and giving it some teeth.