The Vice-Chairman, Councillor Robert Kybird chaired the meeting in the absence of the Chairman, Councillor Borrett.  Councillor Borrett would be joining the meeting later.

To confirm the minutes of the meeting held on 11 February 2021.

The Minutes of the meeting held on 11 February 2021 were confirmed as a correct record.

None.

To receive apologies for absence.

An apology for absence had been received from Mark Hodgson, External Auditor.

The Vice-Chairman informed Members that the Chairman was running late but would be joining the meeting as soon as he could.

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.

Councillor Cowen, the Executive Member for Finance, Revenue & Benefits, Councillor Robinson, the Executive Member for Customer, Digital & Performance and Councillor Ian Sherwood, the Executive Member for Communications & Governance were in attendance as a number of the reports discussed were included in their Portfolio responsibilities.

Councillor Birt was also in attendance.

To note if there are any training issues/ requests.

The Assistant Director of Finance & S151 Officer informed Members that training on Treasury Management would be held later on in the year.

Report of Mark Hodgson, External Audit.

In the absence of Mark Hodgson, the External Auditor, Alison Chubbock, the Assistant Director of Finance & S151 Officer presented the report.

The main points of this provisional Plan for Members to note were, the audit risks, the summary of these could be found on page 23 of the agenda pack.  Members could take comfort for the consistency of these risks to previous years that had been highlighted in yellow but there were a number of new risks that were highlighted in red.   These new risks were as result of the impact of Covid, in respect of the large number of Government grants received and the expected increase in bad debts and business rates provisions.

The summary on page 25 of the agenda pack in respect of materiality, external audit had used exactly the same basis as before which was gross expenditure and now that the accounts had been published a final figure would be added.

Members’ attention was drawn to The Value for Money (VFM) detailed on page 38 of the agenda pack.  The National Audit Office had updated the Code requirements this year, and the impact was threefold in respect of risk assessment, the criteria for significant risk had been amended and a positive conclusion would no longer be provided and would only be reported by exception if the arrangements were not considered adequate.  A commentary was also now provided in a new annual auditor’s report which replaced their previous annual audit letter.  The risk assessment had not as yet been completed but would be reported later as a matter of course.

A new Audit Manager had been appointed (see page 49 of the agenda pack).  Alison Riglar, the previous Audit Manager have had 10 years of service with the Council, but it was time to rotate, and Amalia Valdez Herrera will now be the main point of contact for Breckland Council.

Finally, the audit fees were on page 58 of the agenda pack, these had increased in comparison to the previous year but was still subject to approval by PSAA Ltd.

Mr Plaskett had a number of questions to ask. 

On page 27, it referred to accounting estimate calculations and felt that this implied that a more detailed explanation had to be provided as to what these estimates were and asked how the Council was going to deal with this.

The Assistant Director of Finance explained that the Team had already carried out this work for last year and was mainly about providing information throughout the year through previous financial reports and performance reports etc.  Further information on this matter would be gathered as the audit progressed.

The second question was based on Government Grants received highlighted on page 31 of the agenda pack and Mr Plaskett asked the Assistant Director of Finance if she could provide him with an idea of level of grants Breckland Council had received over the last 15 months.

In response, Members were informed that it was in the region of £50m.

Mr  ...  view the full minutes text for item 23/21

The Chairman apologised for his lateness and thanked Councillor Kybird for chairing the meeting in his absence.

Report of Maxine O’Mahony, Executive Director for Strategy & Resources and Jason Cole, Assistant Director Customer & Performance and Ryan Pack, Innovation & Change Business Partner.

Councillor Robinson, the Executive Member for Customer, Digital & Performance presented the report.

Jason Cole, the Assistant Director for Customer & Performance and Ryan Pack, the Innovation & Change Business Partner were also in attendance for this item.

The report presented the current status of the Council’s strategic risks as at June 2021 and since the last review at the Committee meeting held on 11 February, a number of minor changes had occurred in relation to such risks that the Council currently faced.

Whilst the majority of risks had remained stable since the last quarter, it was noted that both the financial and cyber risks that were raised at the previous meeting remained the same. 

Covid 19 remained the highest risk to the Council and work was planned to review this risk in the near future; taking into account the on-going national situation and the situation within the Breckland District. It was therefore likely that whilst this risk remained high it was likely to be downgraded in due course.

This was the first meeting of the Governance & Audit Committee since the risk assessment report had been seen by the Council’s Auditors.  The Auditor’s report had been positive, and they had been quite content as to how the risks were being managed, the improvements that had been made and the next steps to be taken. 

The Innovation & Change Business Partner then covered a few general points about risks.

It had been pleasing to receive the positive risk assessment report from the Auditors, and the ‘next steps’ were now being considered.  Equally, having that assessment back allowed the Council to look at the risk policy in greater detail and make any necessary changes ahead of the next meeting in September.

Over the next few weeks/months a strategic risk review would be taking place to ensure that everyone was happy with the scores and target dates moving forward.

Members’ attention was then drawn to the cyber security risk; an update to that risk had been provided from the Head of IT and the risk score and controls remained the same.  The downgrading of the contracts risk was in respect of not having a Senior Manager in post and as the business continuity risk had been achieved for three consecutive quarters as a low risk, it was suggested that Members consider whether this should be downgraded to an operational risk.

It was noted that an additional strategic risk would be added to the next quarterly report in relation to the National Waste consultation.

Members were then invited to ask questions.

The Vice-Chairman had noted that a score of 25 had been given to the impact of the pandemic and felt that this was rather high given the level of the population who had been vaccinated, and the Council’s recent ability to deliver services and personally felt that it should be 4 x 4.

The Innovation & Change Business Partner explained that this risk would be reviewed very shortly.  A discussion with the Executive Management Team (EMT) had been  ...  view the full minutes text for item 24/21

Report of Faye Haywood, Internal Audit Manager.

Faye Haywood, the Internal Audit Manager presented the report.

This first report was the final progress report for 2021.  There were a number of executive summaries included and Members were familiar with the layout.

Attention was drawn to section 2.1 of the appendix where the changes to the annual audit plan had been made on 8 October 2020 but with the Covid pandemic and maternity leave the Plan was unable to be carried forward and this report reflected the internal audit pieces of work accordingly and now concluded the Plan for 2021.

Section 4.4. of the appendix highlighted the reports that Internal Audit had been able to finalise, three of which had achieved a ‘substantial’ assurance rating.  Housing Need and Allocations and Safeguarding had both been given ‘reasonable’ assurance. 

The Internal Audit Manager then progressed through the remainder of the report highlighting and explaining certain sections that she felt would be of interest to Members.

Mr Plaskett drew Members’ attention to page 84 of the agenda pack in respect of the ARP audit which had left him feeling slightly uncomfortable.  He explained that there were many areas that he had noticed particularly the section that said: ‘testing found that 22% of small business rate relief applications had no recorded contact’ and felt that there were several areas that once read did not feel at all right.  Then on page 86 it stated that auditors had awarded this ‘reasonable’ assurance.  There were three urgent actions and five important actions and asked if the Head of Internal Audit thought this to be reasonable.

The Head of Internal Audit agreed that this was a key point raised but what she should have done in this report was to highlight that these findings related to a number of Councils and was the entire ARP arrangement and not just Breckland Council. This was the reason for the gradings which was a little different to what Members were used too.  This would be made clearer in future.

The Chairman pointed out that ARP had its own Board that was external to Breckland and made up of all the partner authorities, and in view of Mr Plaskett’s concerns, he asked if it would be possible to have some feedback from the ARP Board as they would have the operational control what was being proposed.

Members were informed that the Board received the internal audit reports in full and looked at the recommendations in detail and tracked the findings and made sure that the actions were being completed; however, there were Minutes of those Board meetings therefore further information could be provided.

Mr Plaskett felt that if ARP was comfortable with providing further feedback, then that would suffice.

Councillor Monument had also noticed the ARP audits and thought that this was ARP and not specifically Breckland but felt after what had been raised and what she herself had highlighted the sample they had used was not representative of all the Councils and felt that improvements such as more  ...  view the full minutes text for item 25/21

Report of Faye Haywood, Internal Audit Manager.

The Internal Audit Manager presented the report.

The report provided Members with the recommendations that were still outstanding as of 31 March 2021. The Committee had been very helpful in the past in ensuring that these recommendations were completed and calling the Officers to account to the meeting where the responses were not deemed appropriate or further information was required.

Page 106 of the agenda pack at sections 2.3 to 2.6 were highlighted.  A number of recommendations remained outstanding from 2017 to 2021 but there had been some improvement.  There was still a great deal to be done with the Performance Team to resolve these audit recommendations particularly in respect of the historical risks.

Attention was the drawn to Appendix 2 of the report on page 109 of the agenda pack.  At the time of writing this report, the necessary information had not been received but had now although completion had not been verified.

Updates were then provided in great detail for the six outstanding recommendations in 2017-18 and 2018-19.

Mr Plaskett remained concerned as many of the extensions that had been requested were 3 years later than the original dates and wondered if that service area realised the importance of internal audit.

The Chairman pointed out that there had been many changes in staff within the IT Team and this could be as a result of these outstanding recommendations. 

Councillor Cowen, the Executive Member for Finance & Benefits agreed and pointed out that there was a new Portfolio Holder responsible for ICT and he was aware of these issues and was aware that ICT and audit were not meeting the Council’s expectations. The Council was now more reliant on the ICT system with the agile working practices that had been in place since the pandemic and the security of the systems were absolutely vital.

Councillor Birt also raised a number of concerns and felt that IT system used was not as up to date as it should be.

The Chairman stated that all concerns would be passed on to those in charge and addressed accordingly.

Councillor James drew attention to page 109 under BRK1821 recommendation 8 in respect of no longer being relevant as Breckland was no longer co-joined with South Holland DC.  Part of the mitigation comments that had been previously provided was the risk of changing network configuration and remote solutions at both councils was too great.  She assumed that it was possible at one site and asked if this had been done and if it had she felt that this recommendation should be removed.

The Internal Audit Manager felt that the comment that was missing was assurance to the Committee that there were sufficient controls in place currently to enable that audit reference to be closed down.  Further investigations would be required on this matter.

The contents of the report were otherwise noted.

Report of Faye Haywood, Internal Audit Manager.

The Internal Audit Manager presented the report on behalf of Emma Hodds, the Head of Internal Audit.  The report drew on all the assurances that had been provided during 2021, as well as the follow up recommendations.

At section 2.2 of the report on page 116 of the agenda pack the opinion itself had been highlighted and the overall opinion in relation to the framework of governance, risk management and controls at Breckland Council had been given a ‘reasonable’ assurance.  Accounts payable, key controls and assurance and corporate governance received a substantial assurance grading, and the Council’s ability to deliver core services to its residents had not been severely impacted by the Covid-19 pandemic.

No ‘limited’ assurance gradings had been raised in 2020/21 and the Council’s risk management framework and supporting processes had been taken into account.

The remainder of the report and appendices were explained in great detail.

The Chairman was pleased to note that the Council’s services had not been impacted by this pandemic and conveyed his congratulations to all involved. He also felt that the direction of travel in respect of the Assurance Chart at Appendix 2 had improved and congratulated the Audit Team for all their hard work in which had been a difficult year.

RESOLVED that:

1.     the contents of the Annual Report and Opinion of the Head of Internal Audit be noted and approved;

2.     the reasonable audit opinion that had been given in relation to governance, risk management and control for the year ended 31 March 2021 be noted;

3.     the opinions expressed together with significant matters arising from internal audit work and contained within this report be given due consideration and be noted when developing and reviewing the Council’s Annual Governance Statement for 2020/21; and

4.     the conclusions of the Review of the Effectiveness of Internal Audit be noted.

Report of Faye Haywood, Internal Audit Manager.

The Internal Audit Manager presented the Strategic & Annual Internal Audit Plan 2021/22.

This report was normally presented to the Committee in March on an annual basis but for this year, the Plan had been significantly revised to respond to the Covid-19 pandemic and had now only recently been concluded. 

This report covered a number of documents that required Members’ approval, the first being on page 129 of the agenda pack, the Internal Audit Charter.

The Internal Audit Charter was presented to the Committee every two years and the last time it had been approved was in 2019.  It was quite a lengthy document, and it covered the Audit Team’s purpose, authority and responsibility.  It was noted that there had not been any significant changes to this document.

The Internal Audit Strategy was provided to the Committee every year, and again there had not been any significant changes.  The current contract was with TIAA Ltd and had been extended until 31 March 2022.  

The Strategic Internal Audit Plan covered the plan of work over the next three financial years and was subject to change as a risk assessment was carried out annually on each strategic area as shown on Appendix 3 of report (pages 143 to 151).

The Annual Internal Audit Plan at Appendix 4 of the report which provided more details om the timing and purpose of each audit agreed for inclusion in 2021/22. The total Internal Audit provision had been highlighted at Appendix 4 on pages 147 to 151 of the agenda pack.

At section 5.3 (page 142), for 2021/22, the EIAS Internal Audit Team intended to provide cross cutting reviews of high-risk areas to compare control against best practice and the approach taken at other Councils in the consortium for added value. Depending on any changes to the control environment over the year, the annual internal audit plan may need to be revised to respond to emerging risks. The Head of Internal Audit would regularly review the Strategic Risk Register and report through to the Committee any necessary changes to the plan of work.

Mr Plaskett had been surprised with a number of items including GDPR which was a strategic risk but was not planned to be audited until 2024/25 and felt that this should be looked at much more urgently.

The Internal Audit Manager advised that a review had taken place in 2018/19 and there had been no significant concerns raised at that time and no recommendations. It was included in the Strategic Risk Register as a medium risk but would be continually reviewed as to whether this should be brought forward.

On page 144 of the agenda pack, Accounts Receivable had been classed as a high risk linked to the Statement of Accounts, Mr Plaskett was surprised that this was not going to be reviewed in 2023/24.  Members were informed that that this had been reviewed in 2020/21 and had been given a ‘substantial’ assurance rating.  This Audit area was normally carried out on a bi-annual  ...  view the full minutes text for item 28/21

Report of Maxine O’Mahony, Executive Director for Strategy & Resources and Alison Chubbock, Assistant Director of Finance & S151 Officer.

The Assistant Director of Finance & S151 Officer presented the report.

The report was for information only and an update on progress over the last few months was provided.

The External Auditors had been experiencing various challenges over the last 2 years including changes to their auditing standards.  A Redmond Review had been commissioned and links to the documents and results of the review had been included on the report as well as the MHCLG responses.  The key findings from the review had been highlighted on pages 154 and 155 of the agenda pack, one of which was that MHCLG would be working with CIPFA to develop the new standardised Statement of Accounts and were considering making further amendments to the regulations to require the development and auditing of this new standardised statement (subject to consultation). 

The summaries had been highlighted on page 156 of the agenda pack at section 1.8 of the report and for Breckland Council higher audit fees were expected. There would be funding for the current year, but it was unclear whether any funding would be available to cover this in future years.  The Audit deadlines had been extended for this year and next year to 30 September, and there would most probably be some changes made to the summary accounts to make them more standardised across all local government.

The Chairman asked if the timetable could be fitted into the Committee cycle at an early stage to avoid changes to meeting dates.

Members were informed that the date was known for next year so conversations would be had with Democratic Services but the other unknown at this stage was when External Audit would fit in the Council’s audit. In terms of the foreseeable future, the Assistant Director of Finance & S151 Officer was not confident that any further details would be forthcoming until the consultation had been completed.

The report was otherwise noted.

Report of Councillor Phillip Cowen, Executive Member Finance, Revenues & Benefits andAlison Chubbock, Assistant Director of Finance & S151 Officer.

Councillor Cowen, the Executive Member for Finance, Revenue & Benefits presented the report.

He reminded Members of the recent Cabinet meeting where the Quarter 4 Financial Performance report was discussed where it was found that the Council remained in a favourably strong position for this year, and this Treasury Management report underscored all that.   

Alison Chubbock, the Assistant Director of Finance & S151 Officer explained that the report was quite long and rather standardised and there were a few indicators within the report that did not apply to Breckland Council as it had no borrowing needs.

Attention was drawn to page 159 of the agenda pack where it stated that the Council had complied with all of its legislative and regulatory requirements.  The report showed the Council’s capital spend and how it had been financed, highlighted on page 162 of the agenda pack.  The spend against budget was significantly lower than expected and the majority of that underspend related to the following significant items. 

·        almost £3m related to two major power projects that were still on-going but had been delayed partly due to the pandemic and the lack of materials. 

·        a £2m variance on the waste vehicles and equipment assumed to be in place by 1 April but was delayed. 

·        the Worksmart 20:20 programme had also been delayed due to Covid but was almost completed as many Members had seen on the tours.

The investment balances were shown on page 163 of the agenda pack and although a great deal of money had been spent the investment balances had increased. This was an anomaly for this year due to the amount of Government grants received that the Council held for spend in future years.  The Reserve balances had also increased as the cash balances that were held for the Government grants were held in Reserves.

The recommendations to Full Council were highlighted, and it was:

RESOLVED to Recommend to Full Council that:

1) the actual 2020/21 prudential indicators within this report be approved; and

2) the Treasury Management stewardship report for 2020/21 at Appendix B and Appendix C of the report be noted.

Report of Ian Sherwood, Executive Member for People, Communications & Governance and Maxine O’Mahony, Executive Director for Strategy & Resources.

The order of the meeting was changed, and this item was discussed after Agenda item 8.

Councillor Ian Sherwood, the Executive Member for Communications & Governance presented the report.  The Senior Legal Advisor, Sarah Wolstenholme-Smy and the Democratic Services Manager, Rory Ringer, were also in attendance for this item.

The Constitution had to be regularly reviewed by the Monitoring Officer to ensure that it remained fit for purpose. This report detailed the various amendments considered to be appropriate. 

The first few amendments followed on from the separation between Breckland and South Holland District Council and the restructure such as amendments to post titles and the glossary relating to staff.  The report had also tried to future proof the Glossary of Terms so that fewer amendments would be needed following any future restructures; and sought authority for the Monitoring officer and the Senior Legal Advisor to make minor amendments without Full Council approval.

The report also proposed clarification that the statutory officer appointments applied to named officers and not to named posts.  Additionally, the report clarified the legal situation in respect of Full Council meetings as there had been some confusion about Extraordinary and Special meetings in the past. 

The report also suggested that the Constitution be amended so as to add reference to a statutory Standing Order relating to Independent Persons as provided by legislation.   Finally, the Section 151 Officer had also asked for a couple of items to be added, the first was in regard to the financial procurement rules, to provide clarity around grant funding approvals and, secondly, the S151 authorisation in respect of virements and amending the Councils approval mechanism of the transfer of budgets to be in line with the new definition of the key decision, so that a figure rather than a percentage was referred to.

It was clarified that most of these amendments were in relation to the disengagement with South Holland and did not form part of the annual review.

Councillor Birt referred Members to page 187 of the agenda pack and reminded the Committee that the reference to a special council meeting was something that he had previously queried at the October 2020 meeting as it had caused some confusion.  He had been in a great deal of discussion at that time asking what the meaning of a special meeting was and how it differed from an extraordinary meeting as it did not appear anywhere in the Local Government Act and the question still remained.  He also queried section 1.3 of Appendix C that listed those that could call a special meeting and asked how these could be formed.

The Senior Legal Advisor explained that special meetings alone were not specifically referred to in the Local Government Act but were encompassed as such.  The difference was that all other Council meetings could be called by Members whereas a special meeting could be called by the Leader but could be called by Officers as listed in section 1.3 of the appendix.  Special meetings were  ...  view the full minutes text for item 31/21

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.

It was agreed that the Member training would be held prior to the 2 December meeting – date to be confirmed.

The Work Programme was otherwise noted.

To note the arrangements for the next meeting to be held on Wednesday, 28 July 2021 at 10am in the Conference Suite, Dereham.

The arrangements for the next meeting on Wednesday, 28 July at 10am were noted, in the Anglia Room.