Agenda and minutes

Audit & Governance Committee - Monday, 27th January, 2020 6.30 pm

Venue: Committee Room, Municipal Buildings, West Street, Boston, PE21 8QR

Contact: Janette Collier, Senior Democratic Services Officer  01205 314227 email:  janette.collier@boston.gov.uk

Items
No. Item

33.

MINUTES pdf icon PDF 104 KB

To sign and confirm the minutes of the last meeting, held on 11th November 2019.

Minutes:

Prior to seeking agreement to sign the minutes the Chairman sought confirmation that both of the actions identified within the minutes had been addressed.  Confirmation was provided that details of the capital expenditure scheme under the name of the Deputy Chief Executive had been provided:  the second action relating to the Waterways had been redirected to Lincolnshire County Council and was expected shortly.   With the agreement of the committee the Chairman then signed the minutes of the last meeting of the committee held on the 11 November 2019.

 

34.

APOLOGIES

To receive apologies for absence.

Minutes:

Apologies were tendered by Councillor Frank Pickett

35.

DECLARATION OF INTERESTS

To receive declarations of interests in respect of any item on the agenda.

Minutes:

No declarations of interest were tabled

36.

PUBLIC QUESTIONS

To answer any written questions received from members of the public no later than 5 p.m. two clear working days prior to the meeting – for this meeting the deadline is 5 p.m. on Wednesday 22nd January 2020.

Minutes:

No public questions were tabled.

 

37.

DRAFT BUDGET SETTING REPORT AND MEDIUM TERM FINANCE STRATEGY 2020/21-2024/25 pdf icon PDF 96 KB

(A report by Paul Julian, Chief Finance Officer)

Additional documents:

Minutes:

The Chief Finance Officer advised committee that Cabinet had received the Draft Budget Setting Report and Medium Term Financial Strategy 2020/21 – 2024/25 and had approved it for consultation.  As a part of the committee’s governance responsibilities the Chief Finance Officer invited members to consider and comment on the Draft Budget Setting Report and the Medium Term Financial Strategy. 

 

To ensure robust scrutiny and full debate of the report, it would be tabled at the next scheduled meeting of the Corporate and Community committee on 6 February 2020. Comments made by scrutiny would be fed back to Cabinet as part of the consultation process prior to seeking approval at Full Council on 2 March 2020.

 

Members were reminded that their focus was to be on the preparation of the budget and the assumptions underpinning the figures within the draft budget and their focus was directed to the following:

                          

·         A proposed rise in Boston Borough Council’s part of the Council Tax of 2.05% in 2020/21 with Band D council tax being £192.96;

·         A balanced budget for 2020/21 after the one year provisional settlement from Government, incorporating on-going savings from the Transformation Programme of £466,000 and increased fees received from planning applications;

·         Projected budget gap of £1.3m by 2024/25 representing a significant challenge for the Council in maintaining service provision to the most vulnerable;

·         Government’s plan to further localise business rates from 2021 would mean the Council’s resources being likely to come solely from council tax, business rates and fees and charges. 

·         In 2020/21 the Council would continue to be part of a business rates pool across Lincolnshire;

·         Savings target of over £850,000 for 2021/22, which would require considerable focus during the year in terms of bringing forward projects in the Transformation Programme and assessing the impact of future funding proposals as they became available;

·         Rural Services Delivery Grant had been extended for one year so for 2020/21 the Council would continue to receive support;

·         New Homes Bonus tapering down from 2020 to nil in 2023/24;

·         A sustainable and affordable capital programme had been formulated and the revenue consequences built into the revenue budget;

·         The capital programme showed a diminishing programme in future years as resources became scarcer. The programme included spending to renew the refuse fleet in 2020/21.

·         A 1% staffing vacancy had been built into the budget

 

The Chief Finance Officer further advised Members that the future position in respect of funding nationally was uncertain and dependant on, amongst other factors, the outcome of Brexit.

 

 

Member comments followed along with a number of questions included those noted and answered as follows:

 

Concern was noted at the proposed 2.05% rise in Council Tax.  Areas of concern included the estimated increase that had been indicated by the IDB’s whom it was acknowledged had been subject to a very busy year with substantially increased pumping.  Caution was urged that unless the base precept was maintained the gap would get larger and members noted this.  Some Members hoped Cabinet would re-visit their  ...  view the full minutes text for item 37.

38.

STATEMENT OF ACCOUNTS 2019/20 - ACCOUNTING POLICIES pdf icon PDF 175 KB

(A report by Paul Julian, Chief Finance Officer)

Additional documents:

Minutes:

The Chief Finance Officer presented the report to demonstrate compliance with the Accounting Code of Practice which was reviewed by CIPFA each year.

 

Following amendments to the 2019/20 Code of Practice and ensuring clarity and consistency with the Council’s own policies and Financial Statements, a number of small changes had been required to the Council’s own policies.  The report set out there were a small number of changes, neither of which were expected to impact on the Council’s financial reporting but were reported for completeness.  The first item was Employee Benefits which had reduced the content to cover ‘benefits payable during employment’ and ‘termination benefits’.  The second item was Fair Value Measure. The policy had been amended to reflect the Fair Value Measurement of Non-Current Assets only, with reference to Liabilities removed.  Fair Value measurement relating to financial assets was included under the policy for Financial Instruments.

 

On querying the valuation techniques used within the fair value hierarchy the Chief Finance Officer advised it was a rather arcane form of evaluating and where, specific valuations were unlikely to be found, observational amounts were used to estimate values instead.

 

Members questioned the valuation of the Council’s Civic Regalia along with its Heritage assets and Museum artefacts and the Chief Finance Officer confirmed he would source the information.

 

Action:  PJ

Send valuation information for the Council’s Civic Regalia, Heritage assets and Museum artefacts to Committee members.

 

 

 

RESOLVED:   That the Audit and Governance Committee

 

  1. Approves the Accounting Policies (set out in appendix A) to be adopted for 2019/20
  2. Delegate the final approval, prior to inclusion in the Accounts, of any necessary minor changes to the Section 151 Officer.

 

39.

TREASURY MANAGEMENT UPDATE - QUARTER 3 2019/20 pdf icon PDF 427 KB

(A report by Paul Julian, Chief Finance Officer)

Minutes:

Presenting the update the Chief Finance Officer confirmed the report provided quarter 3 update information through to December 2019.

 

The forecast outturn returns for both cash and property funds was above the original 2020/21 budget.

 

Members’ attention was drawn to point 5.3 of the report which reiterated the notification that had been received from M & G of a deferral of repayments, and advised they would be updated once Brexit had been finalised: officers were monitoring the situation.

 

Concerns were raised in respect of both the borrowing and repayment of the loans associated with the property fund purchases, along with concerns of the interest being paid and suggestions that other options would be more profitable:

 

The Chief Finance Officer confirmed that:

 

  1. As previously advised, loans had been taken out for £15.5million with the remainder being funded from existing cash resources.  
  2. The loans had been taken out for a 50-year period with fixed interest charges of £383,000 for 2019/20. The average interest rate was just below 2.5%.
  3. The property fund purchases and associated loans had been approved within the Capital Strategy at Full Council in April 2018

 

Committee noted the report.

40.

INTERNAL AUDIT PROGRESS REPORT 2019/20 pdf icon PDF 865 KB

(A report presented by an Internal Auditor)

Minutes:

Presented by the Internal Audit Manager, members were advised that the planned 2019/20 Internal Audit programme was progressing well.  Referencing the four summary reports that had received High Assurance, the Internal Auditor advised that one recommendation had arisen from the review of Debtors Key Control Review that a review of the Debt Recovery Policy be undertaken.  It was anticipated that the review would be completed by mid-February 2020.

 

Confirming that a review had been undertaken in respect of the Council’s Scrutiny function, the Internal Auditor advised that as a result of the review medium priority recommendations had arisen. Declarations of Interest, even when none are noted, are to be recorded as ‘No declarations of interest tabled’ within all minutes of each meeting; improvements to the Annual Scrutiny Report; improved pre-planning of work programmes with the forward plan; and a ‘schedule’ of policies to be produced identifying review dates.  All recommendations were being actioned.

 

On questioning a review of BTAC, members were advised that it was expected to commence during the early part of 2020/21.

 

Committee noted the report.

41.

DRAFT INTERNAL AUDIT PLAN 2020/21 pdf icon PDF 2 MB

(A report presented by an Internal Auditor)

Minutes:

The Internal Audit Manager presented a report setting out next year’s draft internal audit plan based on an internal audit risk assessment and combined assurance work.  Strategic and operational risks were also considered along with broad risks and the Council’s priorities.  Appendix C provided a list of audited areas across the Council.

 

The audit was broken down across areas with critical service areas which were the key service areas, due diligence audits included key financial systems. An annual review was also undertaken of ICT.

 

Referencing appendix C a member questioned why CCTV was showing as a high risk auditable area and was advised it was attributed to data protection / sensitivity issues.

 

Members noted the report.

 

42.

MEMBERS' CODE OF CONDUCT WORKING GROUP

(A report presented by the Chairman of the Committee)

Minutes:

The Chairman addressed the committee confirming that he had scheduled meetings, to allow a member working group of the full Audit and Governance committee to meet and debate the draft revised Code of Conduct which had been tabled and found to be too prescriptive.   All elected members would be invited to attend alongside Audit and Governance members.   The outcomes of the Member Working Group would be relayed back to officers to allow them to be taken forward through the committee process for deliberation at Full Council.

 

The Chairman requested hard copies of both the original code of conduct and the draft revised code of conduct be made available to those members who wished to compare them prior to the meetings of the group.

 

The two dates agreed for Member Working Group were:  17 February 2020 and 12 March 2020.  6.30pm start time. 

 

Action: KR   To issue an invitation to all elected members to join the Member Working Group.  To produce hard copies of the original Code of Conduct and the draft revised Code of Conduct, to be made available to any member wishing to compare the changes therein ahead of the first meeting of the member working group.

 

43.

WORK PROGRAMME pdf icon PDF 74 KB

(For Members to consider the Committee’s work programme.)

Minutes:

The Lay Member requested a report on the funding and governance of the PE21 project as soon as possible to identify how it would be funded and by whom.  Urgency was requested on the matter due to similar historic ventures having run into difficulties, due to having no confirmed structure in place.  The Chief Finance Officer advised that PE21 was a part of the overall Town Deal and its funding and governance arrangements.  As such a request would be made for a report on the funding and governance of the Town Deal as it moved forward, and members were advised that the Town Deal Board had already put in place its own measures of governance.

 

The Chairman tabled the following requests for reporting:

 

  1. to look at the budgets and finance of the BTAC committee
  2. to receive a presentation from M&G

 

The Chief Finance Officer confirmed that BTAC as a committee of the Council was accountable and a report would be requested.  He further stated in respect of attendance by the Property Fund Managers, BlackRock would be reporting at the March 2020 meeting and M&G would be invited to either the September or November 2020 meetings with the remaining fundmanagers presenting in due course.

 

A member suggested that the running order of the agenda could be changed to allow the Internal Auditors to present their own reports first and put the Council’s reports on the agenda thereafter which were sometimes subject to lengthy deliberations:  by doing so it would enable the Auditors to leave the meeting earlier.

 

The Chairman acknowledged that the agenda order could be changed, but on asking the Auditors if this would be beneficial to them, was advised that as they had an interest in hearing all the committee’s deliberations, they would remain for the duration of the meeting notwithstanding where their items were listed within the agenda.

 

Questioning the Council’s position on auditing the various Parish Councils across the borough, a member was advised that the Council had no jurisdiction and that the Parish Councils had their own auditors, and support, notably from LALC (Lincolnshire Association of Local Councils).