Agenda and minutes

Audit and Governance Committee - Tuesday, 4th April, 2017 6.00 pm

Download documents using the MOD.GOV app

Venue: Council Chamber, Town Hall, Royal Tunbridge Wells, TN1 1RS. View directions

Contact: Mike McGeary  Democratic Services Officer

No. Item


Apologies for Absence

Apologies for absence as reported at the meeting.


Apologies for absence were reported from Councillors Hamilton, Moore and Ms Palmer.


Declarations of Interest

To receive any declarations of interest by members in items on the agenda.


For any advice on declarations of interest, please contact the Monitoring Officer.


There were no declarations of interest made, within the provisions of the Code of Conduct for Members.


Notification of Visiting Members Wishing to Speak (in accordance with Council Procedure Rule 18)

Members should indicate which item(s) they wish to speak on and the nature of their concern/question/request for clarification.


There were no other members of the Council who had registered their wish to address the Committee, within the provisions of Council Meetings Procedure Rule 18.


Minutes of the Previous Meeting pdf icon PDF 250 KB

The Chairman will move that the minutes of the previous meeting, dated 5 December 2016, be signed as a correct record. The only issue relating to the minutes which can be discussed is their accuracy.


In accordance with Council Meetings Procedure 16.1, the Chairman will sign the minutes of today’s proceedings at the next scheduled meeting.


The minutes of the meeting of the Audit and Governance Committee dated 5 December 2016 were submitted.


RESOLVED – That the minutes of the Audit and Governance Committee dated 5 December 2016 be approved as a correct record.


Update on Complaints Received under the Members' Code of Conduct pdf icon PDF 163 KB


Keith Trowell, the Senior Lawyer and Deputy Monitoring Officer, presented an update report on complaints received under the authority’s Members’ Code of Conduct, for the period ending 17 March 2017.


Mr Trowell advised that, since the meeting of the Committee held on 5 December 2016, no further complaints had been received.


Mr Trowell added that there had been one outstanding complaint reported to the last meeting. He added that the complainant had been advised that the issue could not be considered further without additional information being provided. Mr Trowell said that nothing further had been received from the complainant and therefore the matter had now been closed.


RESOLVED – That the update report on complaints received under the Members’ Code of Conduct be noted.


Safeguarding Update pdf icon PDF 393 KB


Adam Chalmers, the Head of Communities and Engagement, presented an update report on the Borough Council’s progress towards implementing the recommendations of a Mid Kent Audit report on ‘safeguarding’, undertaken in November 2016. He added that the reason why the progress report was being submitted to the Committee was because it had rated the authority’s control measures as ‘weak’.


Mr Chalmers advised that, in response to the outcome of the audit, an officer ‘Safeguarding Operations Group’ had been established, with a remit of reviewing the findings in detail and agreeing the recommended actions. The report listed the 12 audit recommendations and provided an up-to-date progress report on each issue.


Mr Chalmers drew particular attention to the one ‘high priority-rated’ action which had been slightly delayed but which had been signed-off at the most recent meeting of the Safeguarding Operations Group, namely the introduction of a Disclosure and Barring Service policy. Mr Chalmers added that this draft policy was now awaiting the approval of the authority’s Management Board and, possibly, the General Purposes Committee, before implementation.


Mr Chalmers ended his introduction by providing some context around safeguarding. He stressed that the Borough Council was not the provider of any ‘children’s service’ or similar, thus the safeguarding controls were very much centred on internal procedures.


Members of the Committee considered the report and the specific progress under each of the 12 actions and raised a number of questions.


The Chairman began by focusing on safeguarding training. He said that, as a school governor and in his charity work, he had undergone relevant training. He asked whether something similar would be provided for members of the Borough Council. Mr Chalmers said that this process had started, with the Cabinet Portfolio-holder responsible for this area, Councillor Weatherly. He added that it was the intention to widen this member training at some point, as appropriate.


Councillor Podbury asked for an explanation of the difference between the former ‘CRB’ checking system and the current ‘DBS’ process.  The Chairman explained that a DBS check had replaced the former CRB process but was largely the same, in other words it enabled an employer to check someone’s criminal record if they applied for certain jobs or voluntary work, for example working with children or in healthcare.


Independent member Tony Quigley noted that many of the progress updates listed against the 12 actions were phrased as “will be” undertaken, rather than “had been” implemented. He asked how many of the actions remained outstanding.


Mr Chalmers explained that the reason why seven of the actions were not yet complete was because of one of two reasons: either they were still awaiting final ‘sign-off’ by the Management Board or because, in some other cases, further discussions were still taking place with colleagues from Maidstone and Swale Borough Councils or, in a few cases, with contractors who were actually delivering some services. Mr Chalmers added that, once these discussions had been completed, and Management Board agreement obtained on the DBS policy, there was  ...  view the full minutes text for item AG53/16


Strategic Risk Review pdf icon PDF 105 KB

Additional documents:


Lee Colyer, the Director of Finance, Policy and Development, presented a risk management report, which described the authority’s arrangements for managing strategic risk. The report provided an update on the evaluated threat level as well as the controls in place for each of the 10 risks identified.


Mr Colyer added that he would be leading on updating the Committee on the two strategic risks where he was the named ‘officer risk owner’, namely risks 4 and 6.


Risk scenario 4 – Unable to plan financially over the longer term


Mr Colyer highlighted the key areas of vulnerability within this scenario, drawing attention to a number of contributing factors, such as the exposure to costs stemming from successful business rate appeals. As an example of this, he cited the case of the new hospital in Tunbridge Wells, where an appeal remained outstanding from as far back as 2010. He did add that, after a number of representations which this authority – and others – had made, there were signs that the Government was considering dealing with such losses at a national level.


On that specific point, Councillor Podbury asked whether the issue had been raised with Greg Clark MP. Mr Colyer confirmed that the MP was indeed aware of the extent of this Council’s concerns.


Councillor Nuttall asked how these aspects of vulnerability were impacting on the Council’s future plans. Mr Colyer said that this authority had a good record in dealing with unexpected changes to its financial planning, on an annual basis. He added that, in recent years, central government policy changes had been much more frequent, leading to the prospect in 2018/19 of negative revenue support grant being applied. He stressed that, whatever policy changes emerged, the authority knew that it had to manage within its known resources and would continue to mitigate against changes and difficulties wherever it could.


Councillor Chapelard asked the Director of Finance, Policy and Development to expand on the possibility of facing negative revenue support grant. Mr Colyer advised that, as part of the four year funding settlement which Tunbridge Wells had agreed to enter into, the current projections showed that in 2019/20, this Council would have to pay back £600k to central government, rather than receive any revenue support grant. However, he added that the Government had said that they would bring forward their intended policy of permitting local authorities to retain business rates to that same year. He said that Tunbridge Wells had to accept that verbal assurance in its financial planning, adding that this was a major technical element.


Risk scenario 6 – Missing something significant (£100k - £250k impact)


Mr Colyer said that he had reduced both the level of likelihood and of impact of this scenario, based upon: (i) the authority’s track record generally; (ii) the six consecutive ‘clean’ Audit Letters received; and (iii) the effective responses to cyber security attacks.


Independent member Tony Quigley said that the summary of the risk scenarios set out on page  ...  view the full minutes text for item AG54/16


Internal Audit and Assurance Plan 2017/18 pdf icon PDF 134 KB

Additional documents:


Rich Clarke, the Head of the Audit Partnership, introduced the proposed Audit and Assurance Plan for 2017/18, which set out the Service’s risk-based work for the year ahead. He added that the Plan included relevant sections extracted from the Public Sector Internal Audit Standards as well as how it had been compiled and how it was proposed to manage its delivery.


Independent member Tony Quigley sought further information on the ‘audit resource evaluation 2017/18’, set out on page 46 of the agenda, specifically where Tunbridge Wells stood in comparison to the standards described on risk. Mr Clarke advised that Tunbridge Wells had no formally documented risk appetite. However, he added that his Service had a good working understanding of the appetite that exists in practice, adding that this was, generally, on the increase.


Mr Quigley asked whether Tunbridge Wells would benefit from a formally documented risk appetite. Mr Colyer said that the approach followed was that the Council looked at every opportunity on its own merits, adding that each Cabinet report, for instance, included a statement on the degree of risk attached to each decision. He added that he was comfortable that this was a realistic approach.


Mr Quigley then turned his attention to the proposed civic development, specifically the importance of the ‘gateway reviews’. He recommended that such an approach would be of benefit to the Council.


Lee Colyer, the Director of Finance, Policy and Development, said that the approach being followed by the authority was that established by the Royal Institute of British Architects (RIBA), which provided the same opportunity as a gateway review to determine whether the next stage should be entered into. Specifically on the civic development, Mr Colyer said that the Council had determined on 22 February to move onto stage 3 (developed design) and would be in a position to consider moving to stage 4 (technical design) – and make the financial commitment towards the project – in the late Autumn period.


Mr Colyer advised that, at that point, the Full Council will need to be provided with total reassurance about the risks associated with proceeding, adding that it had not yet been determined who would provide that independent assessment. Mr Quigley maintained that the gateway review process was geared up to providing that aspect and he commended that approach to the authority for a project of this scale and complexity.


Mr Colyer thanked Mr Quigley for this proposal, adding that he would study that option further.


Independent member Mr Shiels considered that the authority’s greatest liability related to staff pensions, an aspect upon which he sought additional reassurance. Mr Colyer suggested that the Committee would have the opportunity to examine this element when the draft Statement of Accounts were presented, at which point a discussion could take place on the authority’s process for managing that liability.


Mr Quigley asked that the reference to ‘Ashford BC’ be amended to Tunbridge Wells Borough Council on page 54 of the agenda, which Mr Clarke undertook to  ...  view the full minutes text for item AG55/16


External Audit Plan pdf icon PDF 107 KB

Additional documents:


Darren Wells, the Director of Grant Thornton, the authority’s external auditors, introduced ‘The Audit Plan’, an outline of the audit work which it was proposed would be undertaken in respect of the 2016/17 financial statements and the value for money assessment.


Independent member Jane Hough referred to the issue of ‘materiality’, set out on page 75 of the agenda. She asked to what extent the approach to this issue had changed in recent years.


Mr Wells said that, based upon current professional judgement, the level of materiality was £500k for cash and cash equivalents; for other elements he said that the figure was higher. He added that, for the purposes of planning the audit, Grant Thornton was working to a figure based on 2% of gross revenue expenditure.


Independent member Tony Quigley drew attention to Grant Thornton’s statement (set out on page 74 of the agenda) that the CIPFA Code of Practice 2016/17 would lead to an improvement in the accessibility of financial statements for the reader. He said that this was a welcome development. Jane Fineman, the Head of Finance and Procurement, said that, as a result, there would be some changes to the front of the statements which would make them easier to understand; she added that, as a consequence, there was the likelihood of more repetition within the document.


Mr Wells acknowledged the point made. He added that in a comparison of statement of accounts across Kent, made two years ago, it was noted that Tunbridge Wells’ submission was felt to be the shortest and the sharpest.


RESOLVED – That Grant Thornton’s Audit Plan be agreed.


Future Work Programme pdf icon PDF 25 KB


The Committee’s work programme was presented for members’ information.   


Lee Colyer, the Director of Finance, Policy and Development, proposed that the attendance of a strategic risk owner should be a feature of every meeting. This suggestion was fully supported.


RESOLVED – That, with the above addition, the work programme be noted.


Urgent Business

The Democratic Services Officer will advise if there have been any urgent items of business which have arisen for the Committee’s consideration since publication of the agenda.


The Democratic Services Officer advised that there were no additional items for the Committee’s consideration which had arisen since the publication of the agenda.


Dates of Next Meetings

(a)  Wednesday 24 May, immediately after the Annual Meeting of the Council – to appoint members to the Constitution Review Working Party

(b)  Tuesday 27 June at 6pm


It was noted that the next meetings of the Committee would take place on (i) Wednesday 24 May, immediately after the Annual Meeting of the Council, to appoint members to the Constitution Review Working Party and (ii) Tuesday 27 June at 6pm.


Independent Member Mr James Hedges


The Chairman advised that the four year term of office of independent member Mr James Hedges had ended on 19 February 2017. He added that, as this was Mr Hedges’ second term of office, he could not be re-appointed for a further period of office.


The Chairman paid tribute to the work of Mr Hedges and his significant contribution to the effectiveness of the Committee over the past eight years, which had been greatly appreciated by councillors and officers alike. He added that consideration would be given by the Borough Council to a possible replacement, at the Annual Meeting of the Council taking place on 24 May.