Agenda and minutes

Audit & Governance Committee - Monday, 25th January, 2021 6.30 pm

Public access to this meeting is available via between the hours of 6.15pm – 6.30pm via the main door of the Municipal Buildings on West Street, Boston

Venue: Online Meeting - view the meeting at

Contact: Janette Collier, Senior Democratic Services Officer  01205 314227 email:

No. Item


MINUTES pdf icon PDF 108 KB

To sign and confirm the minutes of the last meeting, held on 9th November 2020.


The minutes of the meeting held on 9th November 2020 were agreed as a correct record subject to the deletion of Councillor Martin Howard’s name from the list of those present at the meeting, and would be signed by the Chairman.



To receive apologies for absence.





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





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 20th January 2021.




RISK REPORT QUARTER 2 - 2020/21 pdf icon PDF 590 KB

(A report by Suzanne Rolfe, IT & Transformation Manager)


Additional documents:


The IT & Transformation Manager presented a report, which provided the Committee with an update on risks as at the end of Quarter 2 of 2020/2021 (April to September 2020) to provide assurance that corporate governance arrangements were in place and functioning effectively.


Strategic and operational risks continued to be managed in accordance with the Risk Management Framework.


Strategic risks, which were monitored quarterly, were reviewed by the corporate management team in Quarter 1, particularly with regard to the impact of Covid-19 and the Strategic Alliance with East Lindsey District Council. They had also been reviewed in Quarter 2 in light of the change in management structure and would be reviewed again in Quarter 3/4 in light of the new Corporate Plan. 


Housing and Budget remained the two high strategic risks in Quarter 2 and there had been no change to the strategic risk scores in Q2.  Full details of strategic risks were set out in Appendix A.


Operational risks had been reviewed in Quarter 1 and 2, with exception reporting of high operational / project risks, and any changes to management assurance levels, being set out in the report.


For 2021/22, the Council would be looking to have a single risk management approach across the Alliance, with strategic and operational risks reviewed as part of service planning.  The Council’s Risk Management Framework was based on the countywide model and so would lend itself to aligning into a single approach. 


In response to questions, the IT & Transformation Manager explained that the health risk was rated as medium as it related to the delivery of the Council’s own health objectives. However, the point made regarding the impact of COVID-19 on services was noted.


The risk relating to flooding would be revised as the barrier was now operational.  The report only related to risks within the control of the Council; details could be obtained from the Environment Agency about other measures to keep the town safe.


Action: SR

Forward details to Members regarding the risk relating to fresh water flooding and regarding the forecast of population change due to Brexit.


It was confirmed that there was a Transformation Plan in place for the Council and that officers were working on a new plan for the Strategic Alliance.


A Member raise concerns about the IT upgrades and accreditation needed.  In response, the IT & Transformation Manager explained that the risk relating to the Public Services Network Compliance Certificatehad been medium for some time and measures were in place to work towards accreditation.  The Audit Report had judged it as a medium risk and, therefore, it was not high enough a risk to report to Cabinet at this stage, though the impact would need to be considered if it carried on into the future. Capacity and resilience within the IT section had been an issue for some time. The risk would appear on both strategic and operational risk registers.


The Portfolio Holder confirmed that Public Sector Partnership Services (PSPS) would be delivering IT upgrades at  ...  view the full minutes text for item 58.



(A report by Adrian Sibley, Chief Finance Officer and Section 151 Officer)


Additional documents:


The Section 151 Officer presented a report regarding the proposed Accounting Policies for the 2020/21 Statement of Accounts, with the draft attached as Appendix A.


The annual Statement of Accounts was one of the ways that the Council demonstrated the stewardship of funds, and its preparation was governed by a series of specific requirements relating to its content and format.

Unless there were major changes to accounting rules and regulation, accounting policies did not change significantly between years because the Accounts would not be comparable from one year to the next. 

The pre-audit 2020/21 Statement of Accounts would be presented to the Committee in May 2021.  The accounting policies would be included within the Accounts, and any changes made as a result of the audit process would be highlighted and explained in the final report to the Committee in July 2021.

There were no changes to the Council’s Accounting Policies for 2020/21. The proposed implementation of a change in the way Leases were treated (IFRS16) had been deferred, probably until 2022/23.


1.    The Accounting Policies, as set out in Appendix A, be approved and adopted for 2020/21; and

2.    The final approval of any necessary minor change, prior to inclusion in the Accounts, be delegated to the Section 151 Officer.



(A report by Adrian Sibley, Chief Finance Officer and Section 151 Officer)



The Chief Finance Officer and Section 151 Officer presented a report, which set out the Treasury Management and relevant capital strategy activities of the Council for the period 1 April to 31 December 2020.


In terms of investment returns, the Council was expecting to achieve a total of £960,000 for 2020/21 comprising £897,000 gross distribution income from property fund holdings (i.e. before deduction of management fees) and £63,000 from cash investments. This compared to the total gross annual budget of £1,077,000.


The Council was generally keeping cash investments short term up to a maximum of twelve months. As the financial climate changed, whom the Council invested with and the amount invested, was under constant scrutiny, taking into account risk at any particular moment in time.

Members asked a range of questions.  The Section 151 Officer advised the Committee that returns from the Council’s property funds equated to approximately 3.5%, which was an excellent rate of return.


The value of the funds had gone down from £20m to £19.5m since the previous year. However, the Section 151 Officer advised Members not to be concerned in this regard because this was a long-term investment. In the same way, when a house-owner rented out the property, the fact that the value of the house might fluctuate in the short to medium term would not be a concern as long as the rental income continued. The excellent rate of return from the property funds was due to the management of the funds by professional experts who ensured the funds yielded the maximum return. 

An increase in interest rates would be to the Council’s advantage overall because it had surplus cash, but long-term forecasts indicated that rates would remain low for some time to come. 

The Portfolio Holder pointed out that the Council’s investments in property funds were at a fixed rate of interest and that it was a long-term 50-year investment. 

The Section 151 Officer reassured Members that the possibility of there being a situation of negative interest rates was very unlikely.



(A report by Adrian Sibley, Chief Finance Officer and Section 151 Officer)


Additional documents:


The Section 151 Officer presented the draft Budget Setting Report and Medium-Term Financial Strategy for 2021/22 to 2025/26 for the Committee to consider during the budget consultation.


On 27th January 2021, Cabinet would receive the draft report for approval for consultation.  The Cabinet report and its appendices were attached at Appendix A.


The report included the recommended level of Council Tax increase for 2021/22 of £4.95.  This represented a 2.57% increase to make the Council’s share of the precept £197.91.


The proposed revenue budget for 2021/22 showed a surplus position currently of £98,000. However, in the following years there was a savings requirement of approximately £700,000 per year.


Members were invited to consider the report in the light of the Committee’s governance responsibilities and make any comments, which would be fed back to Cabinet as part of the consultation prior to the budget’s approval at Full Council in March.


The Section 151 Officer thanked the Accountancy Manager - Revenue and Systems and the finance team for the substantial amount of work they had undertaken.


The £98,000 surplus the following year was mainly due to the delay of the Government’s Fair Funding Review, which had been put back a year due to the pandemic.  However, the following year there would be a deficit.


The report was very positive; many authorities were in a much more precarious position. The Council had recently benefited from funding from the Community Champions budget as well as funding for homelessness. This meant the Council was in a good position and in a good place to make savings.


In response to questions, the Section 151 Officer confirmed that there was no intention to reduce staff; the report forecast that a very small number could perhaps be lost over future years. The Council Tax increase proposed was the highest that could be put in place without triggering a referendum. Officers were erring on the side of caution.


The Portfolio Holder answered questions about the reserves, explaining that the housing reserve was for expenditure such as funding a housing association to provide low-cost housing.  The funding volatility reserve was to provide cover for short-term fluctuations in funding.


A Member then proposed that it be recommended to Cabinet and Full Council that there be no increase in the Council Tax for 2021/22 in order to give some respite to Council Tax payers – many were on low wages and had been hit by the impact of the pandemic, which had also affected mental health. The Council had a surplus of £98,000, which it could use instead of increasing Council Tax.  This proposal was seconded. 


The Section 151 Officer urged caution, as not increasing the Council Tax would jeopardise the balancing of the budget in future years.


Other Members raised concerns about the proposal, including public expectation that the Council Tax increase to be 0% every year.


The Portfolio Holder explained that the Council had received generous Government funding in the current year, but the Council could not rely on  ...  view the full minutes text for item 61.



(A report by John Scott, Internal Audit Manager)



The Internal Audit Manager presented the regular Internal Audit progress report for 2021/21.


Good progress was being made delivering the revised plan – at the end of December 2020, 46% of the Audit Plan had been completed, against the target of 50%.  The Plan would be substantially complete by the end of the

financial year, i.e. reports would be at draft stage but might not have been finalised.


Two pieces of work had been completed in this period, and six pieces of work were in progress.


The Covid-19 Assurance audit report was at draft stage.  This was an assessment to determine if any of the changes caused by the initial lockdown had any significant impacts on the risk and control environment.


Other audits in progress were:

• ICT security assurance

• Council Tax

• Housing Benefits & Council Tax Support

• Payroll


The assurance review of National Non-Domestic Rates (NNR) had been completed and given High assurance. 


The report detailed the results of a piece of consultancy work completed on the Strategic Alliance Memorandum of Agreement (MOA). 


The report also summarised other matters that would be of interest to the Committee.


The Chairman commented that there had been very little slippage within the work plan in the current difficult times. The Committee agreed that their thanks be extended to the Internal Audit team along with the Section 151 Officer, Accountancy Manager - Revenue and Systems and the finance team.



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


Members considered the work programme for the remainder of 2020/21.


The Chairman reported that the Monitoring Officer and Councillor Development Group had indicated that the new Local Government Association (LGA) code of conduct still needed some primary legislation. It would need to be considered by the Standards Sub-Committee in the first instance before it came before the Committee. Ideally, the Council would adopt the code within the current municipal year.