Agenda and minutes

Audit and Governance Committee - Tuesday, 21st November, 2017 6.30 pm

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Venue: Committee Room A, Town Hall, Royal Tunbridge Wells, TN1 1RS. View directions

Contact: Mike McGeary  Democratic Services Officer

Items
No. Item

AG40/17

Apologies for Absence

Apologies for absence as reported at the meeting.

Minutes:

Apologies for absence were received from Councillor Nuttall.

AG41/17

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.

Minutes:

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

AG42/17

Notification of Visiting Members wishing to speak

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

Minutes:

The Democratic Services Officer advised that there had been no other members of the Council who had registered their wish to address the Committee, within the provisions of Council Meetings Procedure Rule 18.

AG43/17

Minutes of the meeting of the Audit and Governance Committee pdf icon PDF 206 KB

The Chairman will move that the minutes of the previous meeting, dated 12 September 2017, 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.

Minutes:

The minutes of the meeting of the Audit and Governance Committee dated 12 September 2017 were submitted.

 

RESOLVED – That the minutes of the Audit and Governance Committee dated 12 September 2017 be approved as a correct record.

AG44/17

Consideration of Civic Complex - Decision Report pdf icon PDF 254 KB

The full set of public papers on the civic development delivery is being provided as a separate pack for members of the Committee. This includes the findings of two independent reviews into the governance arrangements which the Borough Council has followed to date, carried out by (i) CIPFA and (ii) Mid-Kent Audit Services. The Audit & Governance Committee is requested to consider these two review reports and comment on their findings. (Please note that the Committee is not being asked to comment on the civic development project itself, as that falls outside its remit.)  

Additional documents:

Minutes:

David Candlin, the Head of Economic Development and Property, summarised the key elements of a comprehensive report on the extensive work that the authority had undertaken up to and during RIBA Stage 3 (Developed Design), towards the provision of a new theatre and offices and an associated underground car park. Mr Candlin advised that the Committee had been sent a copy of the full public report. He added that this had also been considered by all three Cabinet Advisory Boards, with a recommendation to support; the details of how each Advisory Board had voted were outlined for the Committee.

 

It was noted that the Committee was being asked to consider – and comment on – the two independent reviews into the governance arrangements the Borough Council had followed in reaching the current stage. These had been undertaken by (i) the Chartered Institute of Public Finance and Accountancy (CIPFA) – Appendix X in the report pack – and (ii) Mid-Kent Audit Services – Appendix Y.

 

Dr Robert Banks had registered to speak on this item. He referred to some of the cautions referred to in the CIPFA report, such as (i) it was unusual to see such a significant economic development investment being undertaken “…in the current climate of financial austerity…” and (ii) the financing costs of the loan would amount to approximately 20% of the Council’s net revenue budget. He felt that the biggest risk factor for the Council was that negative Revenue Support Grant would impact significantly on the proposed funding strategy set out; he also considered that forecast ticket sales for the theatre were over-optimistic.

 

Dr Banks drew attention to section 6.6.1 of the CIPFA report, where they had recommended that the Council needed to “evidence value for money from an overall economic perspective, linking to Council objectives and financial benefits”. He asked how the Committee would be able to ensure that this happened.

 

Peter Robinson, who had been one of the two CIPFA team members conducting this review, summarised his report. He said that CIPFA had been asked to review the project to date, which did not include examining the report which was being made to the Full Council on 6 December, where the decision would be made as to whether to proceed with the project.

 

Mr Robinson emphasised how he and his fellow reviewer had been particularly impressed with the vision, ownership and commitment to the project shown by the Council’s senior councillors and officers, the savings strategy, the prudent financial planning and the involvement of the Finance Director – an aspect which he said was not always the case from their experience elsewhere. Mr Robinson also said that he and his fellow reviewer had been impressed with the consultants, the retained architect and the in-house property team.

 

Mr Robinson drew attention to a number of conclusions the review team reached and aspects they wished to see incorporated into the report to be submitted to the Full Council. These included the need  ...  view the full minutes text for item AG44/17

AG45/17

Strategic Risk Report pdf icon PDF 106 KB

Additional documents:

Minutes:

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.

 

William Benson, the Chief Executive, was introduced to the Committee. Mr Benson was the ‘officer risk owner’ for scenarios 3 (‘resident engagement’), 5 (‘national policy changes in the short term that impact negatively on Tunbridge Wells Borough Council’), 7 (‘being unable to meet expectations within resources’) and 9 (‘not managing control and change effectively – staff, management and political’).

 

Mr Benson summarised the key aspects of each risk scenario. On the ‘sickness monitoring’ element of ‘impact on morale’ under risk scenario 7, Councillor Neve expressed concern that the Council was not being sufficiently compassionate in some cases, a view which the Chief Executive noted.

 

With risk scenario 9, Mr Benson said that the authority was moving towards a position where this could be removed from the strategic risk register, adding that it remained for the present because of recent Mid-Kent Improvement Partnership transfers.

 

Under this risk scenario, independent member Mr Shiels welcomed the reassessment of staff resources linked to the proposed civic development. He expressed concern that some individuals could become very stretched as the scheme moved forward to its next stages.

 

The Chairman acknowledged the point, adding that, once a decision had been taken by the Full Council on 6 December as to whether the scheme progressed or not, it was vital that the resource reassessment began.

 

Mr Benson advised that, if the Full Council agreed to move to the next stage, the focus would turn on to the planning application required to be made and determined; he added that, as the project moved towards the occupation of the new offices, the staffing structure would need to be examined. With all stages, Mr Benson said, he would ensure that the strategic risk register was updated.

 

RESOLVED – That the risk management report and arrangements for managing risk be noted.

AG46/17

Interim Internal Audit and Assurance Report pdf icon PDF 137 KB

Additional documents:

Minutes:

Rich Clarke, the Head of Audit Partnership, presented an interim, mid-year report on the work undertaken by the Mid-Kent Audit Service, based upon the audit plan agreed by the Committee in April this year. The update report also set out how the service was continuing to conform with the Public Sector Internal Audit Standards and associated Code of Ethics.

 

Mr Clarke advised that, from the audit project findings to date, there were no matters of broader concern that he wished to draw to members’ attention, as they had all resulted in positive assurance ratings. He summarised each of the report’s main sections and invited member questions.

 

Councillor Podbury drew attention to page 39 of the agenda, where the interim report set out the outcome of a governance review into each of the Partnership authorities’  transparency arrangements. She asked for clarification of the content of the outcome, which had been set out in table format.

 

Mr Clarke said that the main issue for Tunbridge Wells was a need to assemble and present the relevant ‘compliance monitoring’ information on a central webpage, rather than the existing disjointed format.

 

Councillor Hamilton drew attention to the IT Disaster Recovery review. She asked whether there was a need to make recommendations aimed at raising its opinion rating from ‘sound’ to ‘strong’. Mr Clarke advised that a ‘sound’ rating was perfectly acceptable, adding that the issues identified by the review related to the need to synchronise the IT Disaster Recovery and the Business Continuity plans.

 

Independent member Mr Quigley highlighted the ‘exam success’ performance results, which showed a significant drop in 2017/18 compared with previous years. He asked if this was significant. Mr Clarke said that this was essentially down to a re-calibration of exam marking by the Institute of Internal Auditors, who now required an 80% pass rate rather than 50% as previously.

 

Councillor Barrington-King thanked Mr Clarke and his team for maintaining such a high standard of review work. He added that he was very pleased to see that the Partnership was continuing to show its strength in terms of the resilience and rigour it brought to audit work.

 

RESOLVED – That the progress against the 2017/18 Internal Audit and Assurance Plan and findings so far be noted.

AG47/17

Annual Audit Letter 2016/17 pdf icon PDF 114 KB

Additional documents:

Minutes:

Lee Colyer, the Director of Finance, Policy and Development, presented the Annual Audit Letter for 2016/17, as compiled by the authority’s external auditors, Grant Thornton. He advised that this confirmed an unqualified audit opinion in relation to the statement of accounts. However – as previously reported – because a local government elector had raised an objection in respect of expenditure on the civic development programme, the external auditors had not been able to conclude the value-for-money conclusion.

 

Darren Wells, the Director of Grant Thornton, said that the attached Annual Audit Letter was a summary of a more detailed report which existed. He confirmed that the value-for-money verdict would follow, once he had been able to complete his investigation into the objection raised.

 

Independent member Mrs Hough asked when it was anticipated that the investigation might be completed and a verdict issued. Mr Wells said that there had been a significant amount of background research necessary and that he had also undertaken some discussions with the authority’s officers. He also said that he was required to share the result of the investigation with Public Sector Audit Appointments Limited – a subsidiary of the Local Government Association – before advising the authority; Mr Wells estimated that he would be able to provide a final verdict within four weeks.

 

Councillor Barrington-King sought clarification that the value-for-money verdict was being delayed because of the single complaint. Mr Wells said that the external auditors needed to determine whether the issues raised by the objector had a material impact on the governance arrangements of the authority.

 

Parish representative Councillor Coleman asked whether it was right to consider the issue raised by the local government elector as a formal objection. Mr Wells explained that the elector’s correspondence led him to believe that he had to investigate the matter and thus he had to view it as an objection.

 

RESOLVED – That the Committee approves the Annual Audit Letter for 2016/17.

AG48/17

External Audit Progress Report pdf icon PDF 103 KB

Additional documents:

Minutes:

Lee Colyer, the Director of Finance, Policy and Development, introduced a report from the authority’s external auditors, Grant Thornton. The report provided an update on the progress made in delivering the auditor’s responsibilities to the Borough Council and of accounting changes and national issues affecting local government.

 

Mr Colyer drew attention to the section in the report which explained the revised external audit services that would take effect in 2018, under the provisions of the Local Audit and Accountability  Act 2014. He expressed the hope that the authority would benefit from the estimated savings anticipated from 2018/19. Mr Wells noted the point and advised that it would be the Public Sector Audit Appointments Limited who would set the fee level.

 

RESOLVED – That the external audit progress report be noted.

AG49/17

Update on Complaints Received Under the Members' Code of Conduct pdf icon PDF 167 KB

Minutes:

Keith Trowell, the Team Leader (Corporate Governance) and Deputy Monitoring Officer, presented an update report on complaints received under the authority’s Members’ Code of Conduct, for the period ending 10 November 2017.

 

Mr Trowell advised that, since the meeting of the Committee held on 12 September, one new complaint had been received. He advised that the complaint had been considered by the Monitoring Officer and the Council’s Independent Member, who had concluded that the alleged conduct did not amount to a breach of the Code of Conduct. No further action would be taken, he added.

 

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

AG50/17

Annual Review of Complaints 2016/17 pdf icon PDF 310 KB

Additional documents:

Minutes:

Jane Clarke, the Head of Policy and Governance, presented a report on formal complaints received by the Borough Council during 2016/17 under the Corporate Complaints Procedure; she also reported on the decisions of the Local Government Ombudsman in respect of those complaints which had been escalated to that level during the year.

 

Ms Clarke began by reminding members that the authority had operated a three-stage complaints procedure throughout 2016/17, which had been reduced to two stages from June this year.

 

Ms Clarke advised that a total of 436 formal complaints had been made about Council services during 2016/17, which she advised was lower than the number for the last two years. She added that 74% of complaints had been responded to within the timescales set out, which was noticeably below the performance target of 90%. Ms Clarke said that this performance level had led to changes in both the procedure and resource level, the results of which were beginning to show a significant improvement in the current year.

 

The report included a breakdown of which services had been the subject of formal complaints, as well as details of compensation paid out during 2016/17, amounting to £938.50.

 

In respect of those complaints which had been referred to the Local Government Ombudsman – 18 in total – it was noted that none had needed to be progressed towards formal investigation. A copy of the Ombudsman’s ‘annual review’ letter was appended to the report.

 

Councillor Podbury asked if there had been many complaints regarding the temporary closure of the household refuse and recycling centre. Although household waste and recycling was collected by the Borough Council, it was acknowledged that it was Kent County Council that operated the disposal centre.

 

Councillor Barrington-King, who was also a County Councillor, said that the centre would be re-opening on 11 December and added that he felt the communications effort by both councils had been very effective.

 

He added that the complaints report needed to be seen within the context of the population of the Borough. He considered that the Borough Council provided well-managed services across the board and he congratulated the staff involved.

 

Councillor Hamilton asked whether the ‘out-of-hours dog service’ related to dealing with stray dogs, which Ms Clarke confirmed was the case.

 

RESOLVED –

 

(1)        That the customer feedback and issues raised during 2016/17 – and the lessons learned as a result of this feedback – be noted; and

 

(2)        That the Annual Review letter published by the Local Government Ombudsman at Appendix A be noted.

AG51/17

Future Work Programme pdf icon PDF 82 KB

Minutes:

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

 

RESOLVED – That the work programme be noted.

AG52/17

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 the publication of the agenda.

Minutes:

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.

AG53/17

Date of Next Meeting

Minutes:

It was noted that the next meeting of the Committee would take place on Tuesday 3 April 2018 at 6.30pm.