Transcript

Transcript

[ Silence ]

Okay, good evening fellow councillors and officers of Chilwell District Council, our guests, and I particularly welcome the independent persons, it's quite a good title that, Harry Lawson and Sarah Thompson, I welcome you here tonight for the first ever audit and risk committee of Chilwell District Council, the independent persons committee of the Chilwell District Council, the independent persons committee of the Chilwell District Council. Okay, good evening fellow councillors and officers of Chilwell District Council, our guests, and I particularly welcome the independent persons, it's quite a good title that, Harry Lawson and Sarah Thompson, I welcome you here tonight for the first council audit and risk committee of the new council. Okay, good evening fellow councillors and officers of Chilwell District Council, our guests, and I particularly welcome the independent persons, it's quite a good title that, Harry Lawson and Sarah Thompson, I welcome you here tonight for the first audit and risk committee of the new council. Okay, good evening fellow councillors and officers of Chilwell District Council, our guests, and I particularly welcome the independent persons, it's quite a good title that, Harry Lawson and Sarah Thompson, I welcome you here tonight for the first audit and risk committee of the new council. Okay, good evening fellow councillors and officers of Chilwell District Council, our guests, and I particularly welcome the independent persons committee of Chilwell District Council, our guests, and I particularly welcome the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council, the independent persons committee of Chilwell District Council. Tash has already saved the bacon, as it were, if I can use that phrase, because Cotter manages to leave everything everywhere, including mobile phones and car keys, and she found those in the IT department and returned them to me about half an hour ago, so thank you Tash for those. I think, first of all, we'll just deal, if we may, with apologies for absence and the notification of any substitute members. Thank you, Chen. We've had apologies from Councillor Moore and Councillor Wood is subbing, and apologies from Councillor Woodcock, and we're expecting Councillor Brasher to arrive imminently to sub for Councillor Woodcock. Thank you. Perhaps we'll also deal at this stage, if we may, with declarations of interest. Obviously, everyone present, particularly councillors, have the agenda hopefully in front of them, and I'm not going to be rude by reading the wording, but if there's any declarations of interest, perhaps those could be forthcoming at this stage. Okay. All is quiet. No comment. Third item on the agenda, if I'm allowed to move on this stage, petitions and requests to address the meeting. Are we aware of any such petitions or requests? Now, I was going to move on to minutes, but what in the very helpful training I had with Michael Furness earlier and other members of the Chilwood District Council officers, et cetera, who are also present, I think it was suggested maybe that, bearing in mind this is a new committee, that if, and there's no compulsion here, but if any of the councillors or indeed Mr Lawson and Mr Thompson wish to give a brief resume of who they are and what they do, where they come from, et cetera, they're welcome to do that, but as I said, there's no pressure. But I'll start for May left to right with Councillor Leslie McLean, if Councillor you want to say anything to the meeting about who you are and what expertise you might bring or whatever to the equation, please feel free. If not, we'll move on to Mr Harry Lawson. Very briefly, I'm an independent member. I was chief accountant for many years at Hillingdon and I was assistant director at London Borough of Waltham Forest. Since then I've done interim work at Bristol and other cases of interesting scenarios, so I'm very much on the accounting side rather than the audit side and I've been here, I think it's a year now. Nice to meet you all. Thank you very much, Harry, if I may use your first name, maybe Sarah Thompson, if you'd like to say a few words. Hello, I'm Sarah Thompson, so Harry and I were appointed at a similar time, so we've both done just over the year. I'm a senior auditor for Government Internal Audit Agency, so Harry does the finance and I suppose I'm more interested in the assurance and the audit provision. This is my first appointment, so I've never done anything like this before. Thank you, Sarah. Councillor Barrywood. Well, Sarah, welcome to the madhouse. For new members' benefit, Barrywood, I'm a member for Frankford and Hayford's ward. I've been a member of this committee for a long time, but not necessarily as a real member. I had an ability to pop up as a kind of like Judo member for many years, which I always exercised because I was interested. But why was that then? Answer, in a previous life, it sounds a bit ludicrous as if you'd been reincarnated, but you know what I mean. In a previous life, I was the finance director of what was known in the trade then as a next-steps agency. It was a standalone part of government that operated as if it was a business, if that doesn't sound also contradictory, which was the defence storage agency. And so, as a qualified management accountant, by definition, I've always had a, as it were, soft spot for this committee and actually found it interesting and rewarding. And sometimes I used to, because I was that kind of chap, I used to look round the room at colleague members and was struck by the fact how many were dozing off. I thought, why don't they find it as interesting as I do? Answer, they had a life and I didn't. So, but anyway, I still find it interesting. Will, I am down as the group auto sub if people can't make it. As it turns out, and I think I may live to regret this, I'm the auto sub for every bloody thing. Well, thank you very much, Councillor Wood, and I genuinely welcome your presence here tonight. Thank you. The vice chairman, who I wrongly named at the full council meeting the other day, and I do apologise, I've groveled on a number of occasions. It was a genuine mistake on my part, but I welcome Councillor David Rogers as the vice chairman of the committee. And if David would like to say anything, then he's most welcome to do so. Thank you, Chair. I can't compete with Barry's interest, so let's move along. Thank you, David. That's fine. The next Councillor, please, is Councillor Jean Conway. Yes, I don't really think I want to match Barry's performance, so yeah, I'll pass. I'm not sure whether Councillor Ian Middleton will necessarily take the same approach, but we're just about to find out. Councillor Ian Middleton? Yeah, I probably will, actually. I'm Ian Middleton. I represent Killington East on this council. For my life, I founded and ran a small company that became a large company, which was a high street retail operation that had stores, I would say, up and down the country, which sounds rather grand. We had about seven stores, but they were all over the country, which we don't really have any more because of things. And I probably do this more now than I do anything else, but I try to do other things in the meantime. But yeah, so I've been on this committee, I think, for three years and I've been on the council. This is my fifth year, I think. Or is it my sixth? I lose track. Thank you, Councillor Middleton. Councillor Alisa Russell? Hi. I'm representing Loughton and Northmoor and my day-to-day job is a finance manager for an academy trust. So I'm really looking forward to work with everyone. Thank you. Thank you, Councillor Alisa Russell. Councillor Dom Vytkus? I hope I pronounced your surname correctly. Fairly close. So I'm Dom Vytkus, a Councillor for Banbury, Grimsbury and Hightown. Very briefly, I work as a mechanical engineer. And so risk assessments are fairly familiar for me, although slightly different count. And I count themselves slightly less familiar, but also have a little bit of experience from my previous projects I've been involved in. So I'm looking forward to working with you all. Thank you, Dom, if I may say so. So my name is Councillor Nick Cotter. I think I worked out the other night after the fall of the house, Councillor Sibley and Councillor Barry Wood. I'm the third probably longest serving member of the council. However, as I've also said, I've been off the council more often than I've been on as a Liberal Democrat in a conservative area. But there we are. So I'm a solicitor. My day job now is pretty much doing Crown Court advocacy cases in local Crown Courts, Aylesbury and Oxford and Reading. So I defend the indefensible or I do my best to ensure that justice is done. I don't claim to be a finance expert by any means. And in fact, fortunately, my wife, I met at Manchester University when poor Debbie was 19 years of age. She's the brains regarding the finances to our family, which is just as well, because with four children, we needed those brains. So she should really be here. But I'm here in her place. So welcome, everyone. I just want to say just a few preliminary words. Obviously, there's been a change of leadership at the council. And I think I moved to Bistra in 2001. I was originally lived in Manchester, being at Manchester University. And I know Councillor Wood was at the poor relation up the road or down the road, which was Salford University, which is very much the poor relation to Manchester University. Now, just just easy. But being down here since 2001 and as I say, on the council and off since about 2006, as I recall. I'm just very keen as a as a committee that we obviously treat each other with respect and such like. And I'm very confident looking around the room that that will happen. I think it is an important council committee because it's about the finances. It's about ensuring as councillors, as far as we can, that we look after the money, the public money that is paid by hardworking taxpayers, et cetera, and ensuring they get best value for money. And I certainly am not going to be hopefully political in this role. Already, Councillor David Rogers has also already very kindly indicated that if I suddenly get called out to the police station, as is sometimes the case at short notice to deal with some horrible crime alleged, then Councillor David Rogers will as far as possible stand in at short notice. But I intend not to do that unless unless required. So if we just may perhaps move on now to the move back to the agenda. So another thing is just to mention this, I sort of am short sighted. And so I take these off quite a lot and probably need to have two or three pairs of glasses. But I've only got one. So if I keep taking glasses off and putting them back on, that's why. And so the fourth item in the agenda, fellow councillors and officers and our esteemed guests who are on the committee as well is the minutes of the previous committees, of which I was not a member, of course. And those are so someone, I guess, here who was present will hopefully be in a position to confirm the accuracy of the records. But it's gender item four minutes, pages seven to 12. The agenda, a request to confirm as correct records the minutes of the meetings of this committee held on the 20th of March. Twenty, twenty four and the 22nd of May. Twenty, twenty four. Hopefully all committee members have those minutes to hand. I don't know whether someone would be kind enough to volunteer there. Just one correction on 22nd of May that I noticed myself. I had proposed and seconded yourself to be chairman of this committee, but that wasn't the case. Councillor McLean has seconded you. So that is corrected on the version that you'll be signing. Fine. Thank you very much. Any other amendments proposed or any other observations on these minutes, please? I suppose I can sort of validate the minutes for the 22nd of May, but not for the 20th of March. Any comments or observations? Thank you, Councillor Wood. Can anyone second them, please? Agree. Those are agreed, I believe. And I've got to sign my life away now. Thank you very much indeed. OK. So moving on to agenda item five, chairman's announcements. I am not aware of any communications received, which I need to bring to the attention of the committee. Unless Tash or any other colleague here or here abouts is. So I have nothing to report in that regard. So turning to item, we are going to hear from various officers and experts tonight who are going to present in various forms or formats to a greater or less extent reports. The next item is item six, which is the annual report of the chief internal auditor 2023 to 2024. That's pages 13 to 34. So if I could invite, if that's the appropriate thing to do, that report to be presented. Is that correct format? Tash? Yes, thank you. Thank you very much. Evening, everyone. Can everyone hear me? Yes, thank you. Yeah. OK. So, yeah, evening to everyone. I'll do some sort of fairly brief introductions because obviously there's some new members to the committee tonight. I'm Sarah Cox. I'm the chief internal auditor of City County Council. You'll see Catherine's also join me online. She's the audit manager. We've been providing the audit service for Child District Council now for four years. However, this is our last meeting, which is why I keep the introductions fairly brief, because obviously we're handing over to a new provider, which you'll hear sort of later on in the meeting. So in terms of my item here, this is the annual report for twenty three, twenty four. And this is where we provide our overall opinion that feeds into the annual governance statement. I'm very pleased to know the overall opinion is satisfactory, graded as satisfactory. And that's saying that, you know, that's a good there's a good system of control over the systems for governance and risk management and internal control across the council. A couple of things to note to the committee. We confirm that we operate in accordance with public sector internal audit standards. That was recently confirmed through our external assessment, which is completed every five years. And I reported that to the committee back in January 24 in terms of the results of that. This actual report sets out sort of our responsibilities and methodology, how a resource meets all of those standards. And as part of it, it's it's good practice for me to sort of note to the committee whether there's been any limitations placed in our work. And you'll notice from paragraph 4.24 that there have been none. So I've got nothing adverse to report to the committee. We've had good support, full engagement, the senior management throughout the organisation. I think it's been very successful last year and over the past four years. Good, good responses from from officers and auditors. The audit plan was completed in full as we planned to by the end of April 2024. And you'll see there's a summary of the overall conclusions within the report. There was one audit that was graded red and that's utilities management. We identified some weaknesses there in terms of some of the inconsistency in practices and gaps. How services manager, the meter readings and payments, the contract management activity. But a lot of work's been done in this area to address those issues. And it was an audit actually requested by by Michael Furness to provide that assurance and to get this this area sort of back on track. And actually Mona Walsh is I think Mona is also online as well so she can answer any specific questions on that particular audit if members did have them. So, yeah, 4.26 shows the audits that we've completed since the last report to the January ARC committee. So you only have the exact summaries since the last report. You don't have the full year's worth. And then finally, Appendix 1 shows the plan for the year and the conclusion of each audit. So I think that's my bit in terms of introducing the report to yourselves and just whether there's any overall questions. Yes, I believe there's a question from Harry Lawson, please. That sounds very good. And it sounds as though you've had a good last year with last year's often tricky. I'm just wondering what would have needed to happen to make it go from satisfactory to good. Very, very rarely could you expect an organisation to sort of get the absolute top grade. And in terms of it's a very complex, diverse set of risks that manage. I think it's it's would be quite unrealistic to sort of completely expect that because also if we were looking at areas which we were just finding green reports everywhere. We were not necessarily targeting the highest risks and things I think satisfactory for me, I'm very comfortable with the organisation should be very pleased with and what feeds into that as well. I think more importantly than audits and gradients and conclusions is the response the organisation has to the audit reports. And we really do get good buy in from the child district council offices in terms of implementation of the actions. And I think there's been quite a lot of work over the past four years. Strong Section 151, strong monitor and officer supports that. Thank you very much for that answer. Sarah Cox indicated that if there are any questions of her or of Mona Walsh, I hope I pronounced Mona's name correctly. Now's the time perhaps to raise those to any other members of the committee have any questions over and above that, that Harry Lawson just raised, please. Councillor Barry Wood, please. Thank you, Chair. This isn't a question as such, Chair, but an observation because the report, the officers will correct me if I'm picking up the wrong drift a bit here. To me, when you read this report, it more or less says, if not explicitly says, that a lot has happened in the last few years inside the district council in terms of the way it manages risk, the way it manages internal audit structures. And the partnership that officers have enjoyed, I think that's the right word, with the audit team from the county council, which we kind of imported at the time of joint working because it made sense so to do. There's been a lot of plus behind the scenes, that there has been improvements in governance structures and in the way we do things. And I just wanted to check, Chair, that that's what I thought I, inference I gained from the report. So my question is, is that fair to say that? Yes, no, absolutely. Yeah, great. And I should add, Chair, the wise and wherefores of the county council being unable to keep going with providing us with internal audit is kind of lost in the midst of time, really, but it doesn't really matter now. But as an overall message, I think members should know that we have enjoyed excellent service from the county internal audit team and they're going to be missed. They'll be hard to replace. Thank you, Chair. Thank you, Councillor Wood. Question, please, from Councillor David Rogers. Regarding Appendix 3, the utilities management section, the second page, second paragraph details the currently lack of guidance or procedures in place. And I'm sure this has been done, but for the benefit of the committee, this has been done. Question to the officers. There's currently no guidance or procedures in place for staff. I'm advised by Michael Furness that Mona Walsh may be able to assist in respect of that query. I think you're on mute, Mona. I apologise. Thank you. Right. Mona Walsh, hopefully you can all hear me now. Thank you. In terms of the guidance and procedures, work is in hand on that. We're working closely with those within the property team and our own other colleagues at Chairwell. And we are in the process of setting those up and we are on target also to meet the timelines we have been set in the audit. Thank you very much for that response. A question, I think, from next, from Councillor Ian Riddleton, please. Thanks. Yes, question and observation. I mean, yeah, it's already been brought up about utilities management. It's quite a can of worms that has been opened here. The facts. One of the first things that concerns me is under the governance paragraph where it says there was no oversight to cover areas such as competitiveness of contracts, alignment with climate action priorities, which I thought by now we would have been on top of in terms of things like energy, energy utility companies and potential cost savings through coordinated efforts. So it's partly a plea that we don't sacrifice the climate action priorities for the potential cost savings. I know we have to get best value as a council, but there does tend to be a case where certainly energy contracts are more expensive if we go for the greener options. So I think we do need to look at that and work out how we can align those two priorities. But yeah, I mean, reading through that whole section, I was sort of a bit of a goggle, really, that we have a procurement organisation that apparently seems to apply different approaches to different parts of the organisation, which seems to rather fly in the face of having a central procurement organisation in the first place. And so questions like, you know, do we not have smart metres? I know some of the capacity and some of the metres, they can't provide those, but the fact that, you know, there was no there was apparently no control over the how these metres were being monitored and reported on. And yeah, I mean, it's great. It's great that it's been highlighted. It's a shame that it's kind of your parting shot. And I really hope we're going to get on top of this because it does look like an awful lot of stuff here that needs to be sorted out. I don't know if there's any sort of response required. I'll come back on that in a moment, because actually at my sort of briefing earlier today, it was an issue I sort of discussed and Michael Furness was able to impart some, I thought, useful information, particularly with regard to Mona Walsh and moving forward. So maybe I'll come back on that at the end. But if anyone from the County Council or Mona wants to respond at this stage, please feel free to do so. Would you like to Mona or in terms of the management response and implementation? It echoes what I said in my previous response, which is that we have got work in hand. We've identified all of our metres. We now have a regime in place to make sure that metre readings are carried out regularly. Part of the work we have been set is about making sure that we've got the most appropriate of the work metres in place, smart metres, all of those. And also that several of the contracts we've got are what you might call legacy contracts, which go back some time. And when we have the opportunity to change contracts, that is being done with an eye on both our climate responsibilities and any other contractual obligations we've got around utilities. So again, it is work in progress and we are on target to meet the deadlines we can set. In terms of the action plan, obviously we're not going to be monitoring the implementation of the ones that are left, but these are all being passed over to the new audit service. So they will continue to monitor those and follow up. And if there are any issues, they can bring that back to this committee. Thank you very much. I think Councillor Middleton, perhaps one supplemental question. I'm not going to be dictatorial about it, but we have a few things to get through. But Councillor Middleton? Yeah, just picking up on the point about contracts coming up for renewal. So do we have an opportunity then to start harmonising these contracts? So we're hopefully dealing with luck one supplier across the board, which would be much easier to manage, I would have thought. That would be part of the options we're actually going through and we'll be working with our own procurement team as well. Comparing with Appendix 1, there are some management account actions agreed. However, it's already 12 overdue, 12 implemented and it's about 30 which are not due for implementation, which it looks a bit hard taking that you are starting with 12 overdue. How do you plan to cover the backlog? Let me just clarify which one, on Appendix 1, is it specifically on the utilities management one? No, I'm looking at everything. I'm looking at all the points you have. There are a lot of overdue management actions agreed to be implemented. And in total, if you look, there are 12 which are implemented, 12 which are overdue and about probably 30 which are still waiting to be implemented. Yeah, and in terms of the ones that are not yet due for implementation, the ones that are waiting, that's often because, you know, and for some of these audits, like the recent poll we brought back to this committee, they've only just been finalised and the dates have only been agreed. So some of these might have implementations of three months or six months. So that's not an unusual picture to see. No, I'm asking for the overdue mainly. Yeah, so in terms of the overdue ones, again, we have a system where, and the new provider will take on a similar process and you can actually ask them, you know, in terms of how they will do it. But we have a system where we every month send to each corporate director any overdue actions and they can and they, you know, will be monitoring those. It's not a concerning percentage of ones that are overdue. What's concerning is if they're overdue and no one's doing anything. So sometimes dates have to slip a bit or be moved or amended doesn't mean to say progress is not in action. What you can do is ask for more information about those particular ones, if that's helpful, you know, because these are just the headline ones and it's difficult to comment on those, you know, those specifically. But for example, the ones that Mona's taken the lead on in terms of implementation, you see the three that were implemented, nine not due for implementation, but doesn't mean there's no work being done on the nine not due. There's lots of work in progress so that obviously these dates can be met. Sometimes the dates do need to be moved. But you're absolutely right, as an audit committee, you should be interested in ones which are overdue and why they're overdue. We have got a process. So I was continuing with those ones I felt uncomfortable with. I'd be bringing those to Michael and to the chief exec and then I'd bring them back to the audit committee. But yeah, you're perfectly, it's a perfectly reasonable question. If you wanted more detail, you'd be able to get that. Thank you. Thank you very much for that. I just want to touch very briefly on a couple of things in my sort of briefing earlier today that I had with Michael Furness and other members here of the officers. A very helpful briefing, I have to say. One of the issues that was flagged, or we did discuss briefly, was the utilities issue and provision of utilities and the number of meters that may or may not be across Sherwood District Council. And I personally was reassured that it's something that's been picked up on now and that it is something that the powers that be are going to move forward on and monitor. I specifically raised the issue of providers and which utility companies we have to provide our sources of electricity or whatever. We have gas, electricity, whatever it might be. And again, that's something that Michael Furness was able to sort of reassure me on. And I feel confident that that's something that's on the agenda now and will presumably feature at future meetings. I'd also like to take the opportunity, I've only just joined this committee, but I would like to echo Councillor Wood's thanks for the team from Oxfordshire County Council, the internal audit team. Like Councillor Wood, I'm not going to go into the ins and outs of the politics of Oxfordshire County Council and Sherwood District Council. In fact, even if I knew about it, I wouldn't, but I don't know about it anyway, so I've kept out of all that business. But I'd like to thank Sarah Cox and her team for the work they've done up until now. And it's sad to see that probably the first time I've ever seen or spoken to you, well, I'm not saying it'll be the last time, but we meet in these circumstances, but wish you and your team good luck for future. I can say that Connor Monroe, who sat in on the earlier briefing with me and others, has, I feel, reassured that he can take the work forward. And I understand that his organisation, Verito, have a six month contract now as far as internal audit is concerned. And that's all I'm going to say about the actual internal audit organisation who will move forward. But I feel from what I've heard today that that process is in safe hands, having been in safe hands for some time with Sarah Cox and her team. So, as I say, I'd like to echo Councillor Wood's thanks. And I know there's a number of officers who are nodding in appreciation as well. So I'd wish to do that formally on behalf of Councillors and as chair of this committee. So thank you very much. So. Oh, yes. Good point. Tash raises an excellent point to take us to the end of section six of the agenda. This committee, the AAR committee, are invited to resolve the following at one point one to consider, please endorse the annual report, which is set out in the agenda at pages 13 to 34 inclusive. Do I have approval across the board in that respect, please? OK, I have no indication that no one is that people are not in agreement, so we'll proceed on the basis that that's endorsed. And thank you very much again for your work. So move now to item seven on the agenda, which is the internal audit work programme, 2024 to 2025, set out pages 35 to 64 inclusive of tonight's agenda. And I think we're going to get a report of some description from the assistant director of finance. No idea who that person is, but I'm sure they're about to impart their knowledge. Thank you. So I think Councillor McLean's got to give a brief introduction. Oh, yes, indeed. Councillor McLean, would you like to sort of present this part of the of the agenda, please? Thank you. Thank you, chair. This is item seven in the agenda, and the committee is being asked to point one point one and one point two to approve the internal work programme that you've been provided with and also to approve the proposed internal audit charter. This item is being presented to the committee to seek its approval of the internal audit programme for 2024-25 and the internal audit charter. Verito, a shared service company specialising in delivery of assured services to the public sector, became the council's internal auditor, effective from the first of May this year. Verito has been engaged to develop the council's internal audit programme and to begin its delivery. While long term internal audit provision is being secured. The work programme has been developed following consultation with senior management over the past several weeks. The council's internal audit charter has also been updated to reflect the intended relationship with Verito and the council. The work programme for 2024-25 and the proposed internal audit charter are appended to this report. Both council officers and Verito colleagues are present at this meeting and are available to answer any questions the committee may have. Over to you, chair. Thank you very much, Councillor McLean. So as Councillor McLean has thrown the gauntlet down or opened the matter out for debate, if there are any questions, particularly of Michael Furness or Connor Munro in particular, but others, if people wish to question others or put forward any observations, please feel free to to do that now. Councillor Middleton. Thanks. It wouldn't be an art meeting if I didn't bring up Castle Quay. So I was really just going to ask if the tangentially going to bring up Castle Quay under Section 9 in Appendix 1 mentions the value of the property assets or the netbook value of them. And it says the council's assets have a netbook value of 160 million. I just really wanted to know if that, I mean, I'm sure it does, but I wanted to know if that MBV took account of the devaluation of Castle Quay 1 and 2 or whatever we're calling it now. So that's the question from Councillor Middleton. If anyone is able to impart any information, please, please respond. Thank you. Thank you for the question, Councillor Middleton. So what I would say is this figure was taken from the property asset management strategy, which was recently presented to the council in March 2024. So while I wasn't obviously involved in preparing that strategy, given its recentness, you would hope that's the case. But I can't speak for the calculations which then arrived at the 60 million pound figure. The only reason I raised the question was because there was a bit of, I probably won't use the strong word, maybe I will, jiggery-pokery in my view, that we moved it from a capital asset to a regeneration thing. And then it was then valued on fair value or something. So I'm a little bit confused as whether that would still apply then in terms of the overall MBV of the overall asset. So just really wanted to be bearing in mind, yeah, we are talking about 90 million pound loss, in paper loss anyway, that that was taken into account in that figure. Going forward, that was all. Mr Munro, I don't know if you can help further or whether Mr Finesse might be able to impart further information. So can I come back to you on how that 160 million was calculated, if that's all right? Thank you. Thank you very much. Any other questions from any other councillors or the independent members of this committee, please? So on that basis, I think the committee are being invited now to. Just before you do that, Chair, it's not, as it were, a question about the appendix, about the plan, but it's about the background that's referred to. And that, to me, I think, is worthy of the committee particularly noting, and I'm looking at page 43 of the agenda or page 3 of appendix 1, whichever way round you see things. It says there at point 7, savings totalling, this is the strategic context of this business, and it says savings totalling 1.8 million are planned for 24/25, the current financial year. A significant proportion of which are expected to be achieved through service transformation and associated operational efficiencies. And I think, Chair, it's going to be important for all of us, but particularly on this committee, to always bear in mind that there is that backdrop of a strategic objective to save 1.8 million in the current financial years, and which are expected to be achieved through service transformation. So ergo, service transformation is by definition going to be an important remit to follow with some close attention. Thank you, Councillor Wood, and obviously your comments will be minuted. Are they not? All right. Well, in that case, I will at least note your comment, and it's something I will be alive to moving forward. So it won't be minuted, but it will be somewhere in the grey matter. Thank you. Any other questions or observations or comments in respect of agenda item seven, please? So recommendation, the accounts audit and risk committee is invited to resolve the following 1.1 to approve the 2024/25 internal audit work programme and 1.2 to approve the proposed internal audit charter. Do we have agreement across the board, please, in that regard? Thank you very much. So we now move on, I believe, to item agenda eight, the housing benefit subsidy audit going back to 2020/2021. So Councillors will note, of course, the historic nature of this information, pages 65 to 74. And I think, again, I'm inviting Councillor McLean to set the scene, as it were, in this regard, if I've got that correct. Thank you, Chair. And this report, this committee is going to be asked to note the contents of this report. Housing benefits subsidy claim and audit claim for 2021. This report is to provide members of accounts audit and risk committee with an update on the housing benefits subsidy claim and the audit of the claim for 2020/2021. Members to note the contents of the report. Each local authority appointed external auditor is required to certify that the annual claim is fairly stated and to report any errors to the DWP in a covering letter that accompanies the claim. Where there are errors, the claim is qualified and the DWP will seek to reduce subsidy payments to the council. Any error is extrapolated against the total of all payments made in the area in which it is found. A breakdown of an error can be found in Appendix A. Although the value of any errors may be low, the DWP method of extrapolation means that the value can be substantially increased. This methodology is applied to councils nationally. The local authority error overpayment declared pre-order was £96,240, which is below the lower threshold. Subsidy was therefore claimed. Additional testing and extrapolations over the overpayment increased to £114,552 to £210,792. The authority must now repay the DWP £210,792, which will be deducted from our ongoing monthly subsidy payments received from DWP. The financial implications are as outlined within this report within the repayment of 2023/24 subsidy being accounted for within the council's outturn and reserves estimations. This evening we have officers with us who have brought forward these reports and they are able to take any questions. Thank you very much. Just to set the scene, again in my very helpful briefing today with Michael Furness and others, J.C. Scott, who is the revenues and benefits manager, was able to answer a few queries that I had very helpfully. Again, I throw it out to the floor, as it were, if there are councillors or independent persons present who would like to ask questions of officers who may be able to provide further information, please raise those queries now. Thank you. I saw Harry Lawson, I think, raise his right hand first. Thank you. Thank you, Chairman. A very quick one. I've never known housing benefits claims not to be qualified. I don't think in all my years we ever had one. I take it this is qualified? Yes. Again, I'm sort of trying to get up to speed with this, but on what I learned earlier today, I think that's a very fair observation, if I may say so. Others may disagree, and I'm sure they can ask questions or make their comments known, but that sort of fits with what J.C. Scott and others were telling me earlier today. But as I say, others are free to raise queries or questions now, please. Councillor Middleton, please. That look of resignation on your face there. You spotted it. You weren't supposed to see that. Sorry. I'll try and keep a straight face in future. You'll have to practice that one. I'll work on that ready for the next meeting, this meeting. It was an observation, really. Well, this is the first time I've ever come across this. I mean, it seems to me like quite a punitive policy, and obviously wouldn't surprise me if it was. I don't know where it came from, but I wouldn't be surprised if it came from our current government. Well, I would say our current government, but not our current government anymore. I mean, it's particularly is reading it. Some of it. Some of the punitive measures are applied as a result of the false or inaccurate claims by claimants, which I would say is can be largely out of the control of an authority. So for the fact for a local authority to lose potentially funding that can be applied to other people that are making claims seems seems a little bit wrongheaded to me. And the bit that caught my attention was it. Appendix one is entitled Movement to Local Authority Error. So I just wondered whether it whether this is a sort of a change in the way that we operated. Is this, you know, an optional process or is it something we have to do? And is it something new? I mean, I'm just completely ignorant about this. So when we when we complete the claim, it will be broken down into different tenure types, capital types, income types. And there will be an element of the local authority error within those types. So the appendices that you have to the report shows the amount of error that was found in the cells when we first reported it. And then the extrapolation process of post-order position. So it's sorry, but through you, sorry, it's not the word movement didn't mean that this is something we've moved towards doing that we haven't done in the past. No, it just means the movement in the so that the claim itself will record local authority error. So when we say when you submit the claim, you will do an initial claim at the beginning of the year. Then you'll do a mid-year claim and then you'll do a final claim. When we submit these now, now that we submit these, when we do this, we actually look at what our caseload is and how our caseload is going to drop. So that is, sorry, I've just forgotten what I was going to say there. Yeah, if I could just sort of expand on what I think you might be talking about. When we talk about movement into local authority error, initially we would say it's the claimant that has not declared something, for instance. When we audit a claim, we then look and say, well, actually, have we got that claim correct? Because if it's the claimant's fault, we tend not to lose subsidy on it, not to the amounts that we have in the report today. So we have thresholds. We are allowed 0.48% of the total expenditure of the claim for it to be our fault, and we would lose no subsidy whatsoever. In other words, the DWP will give us back the money where we've made errors as a local authority, but it's below that threshold. It's called the lower threshold. If we're between 0.48% and 0.54%, the DWP will then give us back some money. They'll give us back 40% of what was our fault. If we exceed that threshold, the 0.54%, we lose all the local authority error, all the money that is accrued because it was the local authority's fault. Then we would lose all the money associated with that, and that's what the report is actually highlighting. Initially, when we'd done the claim, we thought only 96,000 of that was our fault. It then, after audit, found out that actually we've moved some of that reason from others in overpayment into our fault, local authority error. And therefore, we lose it all because we've gone over the threshold. Yes, thank you. A supplemental question for Councillor Middleton. I'm trying to keep a straight face. So, as I said earlier, the fact that we lose that money, does that have a direct effect on our ability to pay more, to provide more housing support, or housing benefits support? No, we have an obligation to provide housing benefits support. We administer it on behalf of the DWP, but it's how much subsidy the Department for Works and Pensions will give us back, and they will limit the amounts based on the thresholds that I've stated. So, it does have an impact on our finances, essentially, in other words, yeah. It can do, but what we do now is we monitor this every month. So, previously, obviously this is quite a historic report, so previously what we would be doing is submitting the claims throughout the year and not doing thorough monitoring or quality assurance. Now we monitor our LA error throughout the year to see where we are and record where we are on the threshold each month. That's fed back to the team, along with robust quality assurance processes that we've implemented for the team. I think Michael Furness may want to... Well, again, actually, can I just say that this is something I discussed as well earlier, as I think I've already said in the briefing. At the outset of this meeting, I felt I had to declare no interest, but I will declare an interest. I don't declare it already, but I'm a criminal defence lawyer, so I do defend people alleged to have committed benefit fraud, none of whom on my current workload, as far as I'm aware, where the complainant is chair or district council, et cetera. Obviously, if I ever become aware of a case that my practice, which is outside this area, is dealing with, then I'll have to take the necessary measure or measures, but I thought I'd make that general point. So, Councillor Middleton does raise a good point, and I don't think what this report is driving at, but clearly I know, wearing my day job hat that... And I discussed this briefly with J.C. Scott earlier. When claimants make an initial claim, they complete a claim form for whatever benefit it might be, and they have to sign a declaration at the end to the best of their ability. The information they put in that claim form is correct, truthful to the best of their understanding and ability. I also have had a discussion with another member of this committee I won't name before we came into the meeting tonight and indicated, in my experience, for what it's worth, that some people who complete these forms have difficulty reading and writing, some have other impairments, some English isn't their native language, native tongue. I don't think this report is driving it, what Councillor Middleton alluded to, but I did clarify with J.C. Scott that there are processes in place such that, if there is a change of circumstance three months, six months, 12 months into a claim, then clearly claimants have to notify the council of a change of circumstance, and I think everyone in this room knows and understands that. And the only reason I flag that up as well, particularly with J.C. Scott earlier, is because without going into detail, there's been a lot of press coverage recently about carer's allowances where potentially someone overestimating their income to the value of a pound or their capital to the value of a pound have suddenly found that they've been chased for £10,000 or whatever it might be. So anyway, that's not really what this report is about as I understand it, but it is part of a bigger picture, which obviously we'll be alive to as councillors and independent persons on this committee. But as I say, I was rather taken with Harry Lawson's comment that I don't anticipate there's any council in the land, frankly, that this sort of issue doesn't come up and isn't something that has to be addressed in an audit report. And some of the bigger London boroughs where Harry Lawson works, I anticipate the figures will be much, much higher. But there we are. So I hope everyone's had a chance to speak on that report. Councillor, Vaiqas, Dominic. One quick question. I am looking at table three financial impact by area of fail and I can see that capital have percentage error rate of 75%, roughly one every 14 claim contains an error, which after extrapolation, the error value is at least 20 times, which seems to be that contributes quite significantly to our total error that then goes into the WPN potential payment we would lose. So I really want to ask, is there anything that we are doing or we could do to decrease this percentage error rate of this particular area? Very good question, if I'm allowed to comment on it. Well, currently we're actually doing trainings in the reports, we've actually mentioned the key areas where we believe there's been fail. So we've analysed 2019, 2020 and found out causation and we've targeted that way through training. So we have 10. We learnt from the 2019, 2020 audit when we had the out term position for that. So coming out of that, a lot of the errors that we've got in this audit were in the 1920 audit. So we've got 10 key projects that we have rolled out with blitzing certain caseloads where we found high value errors in them. So we've got projects that are undergoing with the team. Sorry, I've timed out. So, yeah, we've got projects on the way and the quality assurance processes that we've got in place now are regularly being fed back. And I think what we found now is where we're learning from these audits, whereas previously we were just taking the information away and we weren't putting anything in place. But we actually we've learnt from them and we've got processes and procedures in place now to hopefully mitigate it going forwards. Would you mind if I ask you to repeat the question about your concerns about the capital? Was it the capital population on the appendices that was provided? Well, it's what I'm seeing is that a large percentage error rate has been observed in this area. Which is why I'm asking, are we doing anything? We seem like we are doing something. So it would be picked up on the things. Sorry, my mic keeps going off with the quality assurance and obviously learning from the audit. So, yeah, we have got things in place. We can give you more information on it if you wanted to. Just to add, I'd be happy to, because the figures I'm looking at, I don't see a lot, I don't see high amounts. So I see that 48 cases in the sample, only one produced an error, but just the figures are high. Well, what I'm seeing in table three, it says claims with errors, eight percentage errors, 7.55 percent, which will make 108 claims in total. That was the first table. Apologies. Thank you very much. Just one question, if I may. Obviously, the information in this report is quite old. And I'm not, you know, I understand there are probably reasons for that, including Covid or whatever it might be, without speculating. And I don't want to hold anyone to an answer here now, but bearing in mind what you have learned in respect of this report and the things you picked up on and what you've just said now about moving forward. Do you anticipate, and I'm not asking you to quote any facts or figures, but that things are probably moving now, hopefully in a better direction, particularly when government can sort of move the goalposts and change the rules and regulations, but that you're alive to what you really need to sort of focus on to preserve, as far as you can, the council revenues? Yeah, yeah, definitely. However, what I would advise is that this is the 2021 position. We're still undergoing an audit for 2021/22. We had a company called CSM Resources that we were working with previously. That company was disbanded in 2021. And the work that we're seeing and we're bringing to Audit Committee now is the work that was done before we were in post. So we've learned from these audits that have happened now. So I would say from '22/'23 onwards, when you start seeing the returns, you should see a significant improvement. Thank you very much. I'd like to thank the officers and everyone who's had an input on this part of the agenda. It's been helpful and I've learned a lot from it, frankly. So as far as agenda item 8 is concerned, after all that buildup, this committee is invited to note the contents of the report. Thank you. So agenda item 9 is the Treasury Management Report, the Annual Performance Report for 2023/24. Agenda item pages 75 to 90. Again, I think Councillor McLean is going to introduce this topic. Thank you, Chair. Yes, item 9, Treasury Management Report. The Treasury Management Outturn Performance Report for 2023/24. This is the position at the end of the financial year 2023/24 for treasury management, which you are asked to note and recommend the report to council in line with the SIPFA code. Headlines at the 31st of March 2024, the council had borrowings of $181 million, investments of $22 million, which gave a net borrowing of $159 million. The net borrowing position decreased by $15 million since the previous year-end report, which was 31st of March 23 at $144 million, primarily due to a £17 million reduction in surplus cash from government grant balances available to be invested, which have been subsequently been spent. The treasury management budget overturn position for 2023/24 was £9,000 surplus, after a further surplus of $1.447 million was transferred to market risk reserve and the interest rate equalisation reserve during 2023/24. The council has operated within the treasury and prudential indicators set out in the treasury management strategy statement for 2023/24 during this financial year. On borrowing, the average borrowing balance for the year 2023/24 was $172 million, an average rate of 2.19%. Due to the interest rate certainty, the council secured by taking PWLB loans ahead of need in July 2022. The average interest rate is well below the average PWLB interest rate listed in table 2. 3.8 million interest paid is below budget for the reporting period, resulting in a small saving of £17,000. 92% of the council's borrowing is with PWLB. These medium to long-term loan maturity dates are spread over the next 11 years, with two outlying amounts maturing in 2048 and 2071. This reduces the refinancing risk. Moving on to investments, the average amount invested for the year 2023/24 was $24 million, at an average rate of 5.21%, with an average time to maturity of 38 days. This rate is better than the one-month average of 5.02 in table 7. The Bank of England's Monetary Policy Committee has not changed the Bank of England's base rate. Since 3 August 23, the interest rate remains at 5.25%. There was surplus income of £84,000 for treasury investments in 23/24. Non-treasury investments, the council currently holds 102.4 million of non-treasury investments at 31 March 24. These consist of 35.6 million in shares and 66.8 million in loans. The council received a dividend from Graven Hill of £500,000, which has resulted in a £579,000 positive variance in budget. You are being asked to note this Treasury Management Annual Performance Report and to recommend the report to Council. Thank you, Chair. Thank you, Councillor McCrae. And again, through myself, if I may ask, if any members of the committee have any questions or observations of the officers in particular who are the experts in this, perhaps they could raise those. Harry Lawson, please. Thank you. Thank you, Chair. This is for the sake of new members, really, because those that have been here before will be very bored of me asking the same question each time. An observation, the Treasury Management here is pretty good. It was very fortuitous when they took out the loans, so that side is one of the best that I see, really. Clearly, the risk is your non-treasury investments. And the question I ask each time is the dividends, well, and the 7.04% interest earned, I'm never clear on this report whether that's a debtor or whether it's cash in the bank. So that's my first question. The second question is around that dividend. Was that dividend correct, below, above expectations, and was it due, did it come when it was due? Thanks. Thank you, Mr Lawson, for that question. I don't know if Joanne Kaye or one of the other officers might be able to assist, please. Yes, that's fine. So, yes, in answer to your question about the interest, yes, the majority of that was paid in cash according to the loan agreement terms. And in terms of the dividend, the dividend was received on target according to the business plan of the company. Any other questions, please, from members of the committee? Councillor Ian Middleton, thank you. Yeah, one was, well, an observation that I just wanted a confirmation on. In the Prudential Indicators report, under 5, the operational boundary and authorised in it. I don't know if I'm reading this correctly, but it says that the operational boundary is 290 million. And the debt estimate is 276.9. So just wanted to be sure that I'm reading that correctly. We're quite close to the boundary there. And the other question was pretty much just my ignorance, really. I didn't really understand. And this is something that Michael, you can explain to me offline if you want. There's other things I probably need to be schooled in. The CFR figures at the bottom where it says closing CFRs. I wasn't quite sure. Is that kind of money we've got left over or is that? Yeah, OK. I'm not going to make myself look any more stupid by asking any more questions on that. So the CFR is the capital financing requirement. So that is the total amount of capital spend that we need to fund through either borrowing or internal borrowing or. They're the two main groups. So it's the total amount of outstanding capital that will ultimately need to flow through revenue over the lifetime of the assets. So is that kind of rolled out? That's rolled up. I can see there's an opening figure and a closing figure. So that kind of rolls over every year and just goes up or down then, does it? Yes. And we are repaying it every year through the minimum revenue provision. OK. And then we're borrowing more financing? If we have new capital projects and the capital financing requirement will go up. OK. And was I right about the operational limit? Yes, we are. So, yes, we are close to it. The operational boundary is one that is an early warning sign if we go over it. But under the rules, we are allowed to temporarily go over it if we need to. I'd rather we didn't and we haven't. And then the 310 authorised limit, that's an absolute limit that cannot be exceeded. OK, thanks. Councillor Middleton, are you happy as far as we can here tonight to, in respect the responses? There are some other things I don't understand as well, but I'll talk to you. Thank you. Councillor Barry Wood, please. Thank you, Chair. Just a couple of points stemming from what we've said this evening. The first one is that the dividend from Graven Hill Development Company, yes, it was on time, yes, it was anticipated, yes, it was the right amount kind of thing. But what's of interest, perhaps that's the wrong word, what is significant there is that it was the first one. And so new members should be aware that the council owns all the shares in Graven Hill Development Company. And so when there is a dividend, we're the only one who get one. But it is a good thing that the company operates in such a way that it can pay dividends. Housing developments for little development companies, if you know what I mean, it's not like it's Barrett's or something, for little development companies do take time to come on stream in such a way that they can pay dividends to the shareholder. So the council needs to anticipate, I guess, further dividends and officers will be able to advise about what your anticipation should or should not be, Councillor McLean. But it is a positive thing in its own kind of like bubble, I guess is what I'm trying to say, Chair. Oh, the other thing I was going to say is PWLB is a, what do they call them? Yes, I want to say it is an anachronism. That's not right, is it? It's one of those, yes, acronym. It's a quango. It's an arm of the state. It's a state bank, really. I think it must have been invented by a Labour government and I'm not sure. But anyway, it is a good place to borrow from and so largely that's what we tend to do, for that reason, that's all. We borrow from the state rather from Barclays and then get accused of propping up states that we shouldn't. No, I'm digressing now. Forgive me, Chair. And I'll stand to be corrected, but I think you can only borrow from them for capital projects, is that correct? I believe, yes. So it's not necessarily capital projects we borrow for cash, but in terms of balancing the budget, absolutely. We can only borrow for capital projects in that respect. We can't borrow to fund revenue on an ongoing basis. Thank you very much. Thank you for that clarification. Question from Councillor Ian Middleton, please. Yeah, just on that point, I think the name refers to the time when government used to fund public works, which I don't think they do anymore, except through that board. And I think it goes back as far as English Heritage, which used to be called, needs to have another name, but anyway, digressing. Yeah, it's just that from what Councillor Wood said, and I know this is the first time that we got a dividend from Graven Hill. I just wondered, because I've asked this question before, that whether or not it was a loan that we get interest on or an investment that we expected to receive dividends from. And I've asked Michael this separately and he said it's both, which is great. But I just wondered what triggered this point this year, then, that we actually managed to get a dividend, because normally that's if the share value goes up or if the company's worth more than it was last year or something. Was it just a whim or was there a reason for it? So it wasn't just a whim. In terms of Graven Hill, it is set up as a company. And yes, we have provided it with loans and it then needs to pay interest on those loans. So they do. And we get the cash back in, which is great. But it has also been set up as a company which is ultimately designed to generate a profit. And in its latest business plan, it did anticipate that it would provide us with 500K dividends by the end of March last year, which it paid on 28th of March, I think it was. Why now? I guess that follows on from what Councillor Wood said, that it takes a while for the company to get into a position where it is making a sustainable profit. And its accounts, which are out there in the public for all to see, demonstrate that it has been making a profit for the last few years. It needed to have sufficient value on the balance sheet and the profit and loss account to be able to issue a dividend. And it also needed to consider its own cash flow needs, that it wouldn't put it into financial stress from a cash flow point of view of paying out that cash to the Council as well. So all of those things came together. But it was also in their plan that they would pay a dividend this year. Councillor Middleton. So does it stack up then? They've not just made this because they promised to do it. It does actually. Because you said they've been making a profit not just this year. And I appreciate what you're saying about the need to build up the balance on the balance sheet. But I just wanted to make sure that it wasn't just a case of we said we're going to do it, so we'll do it. No, no, no. It's a company that's owned by the Council. For the best of my knowledge, absolutely not. And the Council was not leaning on it to say you must pay us a dividend. I mean, the out-turn position, which will go out publicly very soon, will demonstrate we did not need to lean on them to balance the books or anything like that. Just my observation on Graven Hill. Much to the consternation of my family, Graven Hill is in my patch, as I say, and that annoys my family immensely. But I do welcome that clarification about the Graven Hill situation. Thank you. So I think, subject to any further questions or observations, the request now is to move to the recommendations vis-a-vis the Treasury Management Report. And this committee is invited to resolve the following. 1.1, to note the contents of this Treasury Management Annual Performance Report. And 1.2, to recommend the report to the Council. Do I have confirmation across the board? I understand a proposer and a seconder for this particular item on the agenda. I think I have Councillor Wood as a proposer. Do I have a seconder, please? Councillor Rogers, thank you very much. I think it's not a named vote. It's just a hands up or whatever. Anyway, thank you very much. Thank you. So we move on now, I think, to Item Agenda 10, the Annual Governance Report, 2023 to 2024, pages 91 to 106. Again, is this Councillor McLean who introduces this? No, thank you very much. Sorry, I'll put my glasses on again. If Mrs Mail could introduce this item, please. Thank you. Yes, good evening, members. I'm the Deputy Monitoring Officer and this is the report of the Monitoring Officer who can't be here today. It's an annual cycle that we have to produce the annual governance statement, which then gets published alongside our accounts as part of overall assurance of governance matters. It's, as you will see, quite a high level document, but what informs it and what sits underneath it is quite a bit of information, much of it in the public domain around the Council's decision making, its priority setting, its performance, its risk management, all of those things which members have seen in other forums. But it's also based on key members of staff, assistant directors in the Council who are required to put an evidence-based case together to show how effective their own systems, processes, delivery mechanisms have been. That is then all created by the Monitoring Officer, tested through the corporate leadership team and then ultimately comes to you. You'll see this year it gives an assurance to the committee around all of those areas that I've just discussed and it also picks up the actions from the peer review from last year and how the Council has responded. You'll see there are some actions still to be moved forward, but in the main, the progress made from the peer review has been very good. In conclusion then, it sets out areas for focus for next year before an assurance of a similar level can be given and on that basis it's recommended that you approve this and authorise the Chief Executive and the leader who was, effectively leader, Councillor Wood, for the municipal year that this statement relates to, to sign it. Chairman, that's all I would wish to say unless there are any questions. Yes, thank you. And thank you for the clarification that Councillor Wood is the person responsible, as it were, for signing off subject to his agreement and approval. Do I have any questions or observations, please, from members of the committee? I think that's a no. Maybe the hour. We're approaching five to nine. But I found the report very, very interesting and perhaps a bit more my field than some other areas tonight. But thank you very much for that report. So just moving to the recommendations. So we adopt a similar procedure, I think, to that which we did for the last report. The committee resolves 1.1 to approve the annual governance statement 2023 to 2024. 1.2 to authorise the leader of the council, Councillor Wood, as was, and the chief executive to sign the annual governance statement on behalf of Cherwell District Council. I believe I need a proposer, please. I need a proposer and a seconder, if I may. Thank you. Councillor Wood takes centre stage again. Thank you, Councillor Wood. Proposer. Do I have a seconder, please? Councillor Ian Middleton, thank you. And perhaps a brief show of hands. Thank you very much, members of the committee. Are we OK? Is that all right, Tash? Right. So we move on to item 11 on the agenda. The audit completion certificates 2020 to 21 and 2021 to 2022, pages 107 to 114, inclusive of tonight's agenda. And I turn to the officer colleague, Michael Furness, to my left to introduce this item, please. Thank you, chair. So hopefully this is a really quick item. This is really tying off some loose ends from the audits for 2020/21 and 2021/22. Whilst the audits have all been signed off for all practical purposes, until the audits could be formally signed off, EY had to wait for clarification from the government that no more information was required in terms of whole of government accounts in respect of Chirwell's accounts. They've now had that confirmation. So this is the final piece of completion work in terms of signing off the two years of audits. And it's as simple and straightforward as that. Thank you very much, Mr Furness. I don't know whether there are any questions from members of the committee or observations to Michael. If so, perhaps now you could raise them. No, everyone sits there in silence. Even Councillor Middleton says the day is getting old, the day is getting on. So I think the invitation in this case, the recommendation is to note the formal completion of the audits for the years ended 31st of March 2021 and the 31st of March 2022 to note the associated audit completion certificates, appendices one and two, duly noted. Item agenda. Do we all agree? Agreed, agreed. Everyone's agreed. Thank you very much. Noted. Thank you, Tash. Agenda 12 is the external audit plan 2023 to 2024. This introduces the company, the auditing company, Bishop Fleming, to the party, as it were. Agenda item, as I say, 12 pages 115 to 134. Now, again, I'll be corrected if I'm wrong, but I believe I return to Michael to my left to receive the report and the plan, sorry, and to have any discussion following that introduction. Thank you. Thank you, Chair. So I think my role in this is very brief at this point. It is basically to say welcome to Bishop Fleming and Mark as we've done a cover report, but essentially this is their external audit plan for 2023/24. So I'm going to hand it over to Mark if that's OK. Mark, Councillor Nick Carter, the chairman of this committee, thank you for joining us tonight at this hour and thank you for your patience and sitting there waiting at your starring role. So members of the committee here, obviously if there are questions that you have of Mr. Bartlett on behalf of Bishop Fleming, questions or observations now, please, is the time to raise them with Mark. Councillor Ian Middleton. I'm just going to ask the blunt question. Why have we dumped Ernst & Young and why are we now going with another company? Was it just a tender thing or are they cheaper or do we not like Ernst & Young anymore? So it's a very easy answer to that one. The Council works through PSAA, that's the national organisation that procures external audit across all of local government and it is something ridiculous, like 99% of all local authorities sign up to that approach. And the previous cycle for the contract period came to an end as of the 22/23 statement of accounts work. So a new five-year contract was required starting from 23/24 onwards and ARC recommended to Council to agree to use PSAA so then Council agreed that was the approach we would take. And through PSAA's national tendering process, Bishop Fleming were the successful tenderer who was awarded the contract at Cherwell. I don't know if you wanted to add anything to that, Mark. Yes, if you're permissioned, Chair, if I may. So just a quick introduction. First of all, I'm Mark Barthes, I'm a Director of Bishop Fleming and as Michael said, so we're the Council's external offices for the five-year period from 22/23 and that's, as Michael said, that's an appointment by PSAA. I think I'll just give a quick run through the audit plan as well. Yes, please, Mr Bartlet, thank you very much. Yeah, I mean, if I could just also give apologies to Craig Sullivan, who's the key audit partner, who can't be here this evening. So our 23/24 audit plan is set out from pages 119 within your papers. It's probably worth just noting slightly unusual circumstances to be presenting an audit plan when the prior year audit of the accounts has not yet been carried out. And as members may be aware from previous conversations, there's a number of consultations addressing the backlog within local government audit that are still in progress and yet to be concluded and I'm assuming are now presumably delayed by last week's announcements as well. So I won't go through the audit plan page by page. We just wanted to highlight a few things to your attention. So the scope of our work is set out from page 122. So that sets out the basis for the audit that we're carrying out. And I think perhaps most importantly to highlight is from pages 124 to 126 of your papers. That's where we set out our significant risks that we've identified at this time. I think for anyone who's seen audit plans for the predecessor audits, I think that these are fairly usual risks that you would see in a local government audit plan. But it is important to note that that is our indicative position because clearly the audit from 2023 hasn't been carried out. It's unlikely to be carried out. And we will need to be revisiting things as we get underway with our work. The outline timetable for our work is set out of page 128 of your papers. And this is very much an indicative timetable because as I said, the timelines are not yet clear. I think we had an idea of what the timelines might be looking like before last week's announcement subject to the consultation. But we're working on the assumption that that is likely to slip. But there's been no formal communications on that. And it's very much an active discussion within the sector at the moment. So that's all I'm going to say on the report, but happy to take any questions that members have got. A question from Harry Lawson, one of our independent members of the committee, please. Thank you. Hello. I was never satisfied with Ernst Young's answer as to why they couldn't get going on a year end just because year end minus one wasn't yet completed. There is tons and tons of work that they could still do. Do you intend to be able to start work on twenty three, twenty four, given that twenty two, twenty three isn't done? Or are you in the same situation where you can't do anything? We're in a somewhat similar situation in that we can't carry out a review of prior audit working papers with the prior audit, not having been concluded, no opinions being issued. So there's a lot of discussions going on within the sector at the moment about how, as auditors, the incoming auditors will get assurance over open balances, which is a key thing for us. I understand that. But I mean, in the good old days, when we used to manage to get sets of accounts out by the end of May, we used to have pre-ordits for which an awful lot of work, especially on the income and expenditure, would be done prior to even year end. So I know I realise that you can't give an opinion on whatever, but there must be lots and lots of routine work that can be done without the prior year. Yes. So we are looking to get some initial early testing done on those balances, as you suggest, because on the CIS, on the revenues, income revenue side of things, that is testing that can be carried out in the years. So we've got sample requests out that officers are responding to and providing evidence for. Excellent. Good. Mr Bartlett, I have a question, if you don't mind. It's going to page 128 of our agenda and the sections you've just sort of taken us to. And it's in respect to the timetable, and it touches on, I'm sure, what Harry Lawson was saying just then. And as far as the timetable is concerned, reference at the third box down, Autumn 2020 4-TBC, to be considered, presumably, review of predecessor auditor's files. Now, just as a complete layperson in this field, mine's the legal field, as it were, what does that mean in layperson's language? Does that mean, is that done through Sherwood District Council, or do you have to be in contact, pick up the phone, as it were, or email Ernest Young, EY, to sort of progress that side of things, please? So that will be a process that is carried out between us and the predecessor auditor, so that process wouldn't involve the council. In normal circumstances, we'd obviously be reviewing a completed audit file, and we'd be able to take assurance just from those balances. There are discussions going on at the moment as to whether we may want to perhaps consider looking at the last completed audit working papers in terms of getting some assurance over the last audit work that has been carried out. But these are unusual times. I mean, the term unprecedented keeps getting thrown around ever since COVID, but I think this is quite unprecedented in terms of local government audits as well. So we can't, Ernest Young, we're not going to let us review anything until they have concluded at whatever point they arrive at a conclusion following the consultation on 22-23. We will then, as soon as possible after that, look to carry out that process to get as much assurance as we can over open balances and the approach of the prior year auditor. That's quite an unusual situation compared to where we would normally be on that sort of thing. And just sort of going back on that very briefly, as far as any warranties or guarantees or undertakings or whatever are concerned, do you have to be satisfied vis-à-vis warranties, guarantees, undertakings, or is it ultimately chair or district council that has to be satisfied? I just want to, if you could just explain in layman's terms or layperson's terms what that sort of undertaking or letter, I think we've heard reference to a letter somewhere along the line, what format does that take and what would satisfy you as the new external auditors? So that is us that needs to be satisfied rather than the council. So obviously we've got a risk assessment process to go through. We need to establish what our audit approach will be based on the assurances that we can get from the predecessor auditor. Clearly where there hasn't been an audit of the prior year figures, we have to consider what the impact of that is. And that is something that the sector is considering as a whole in terms of issuing guidance to the incoming audit firms as to what sort of assurance should we be provided with by the outgoing firms. And if that's not sufficient, what procedures we may need to carry out in order to get that assurance over open advances ourselves. Just one final point to that. I don't really want to labour it, but obviously I work in the legal field myself and I know that, you know, whenever you get undertakings, warranties, guarantees, and if the lawyers get their foot through the door, it can all get quite messy. And much of what I read about auditing and council auditing, I sadly comes from private eye, which I'm not going to quote. But is this going to be a, you know, industry wide sort of, you know, understanding or whatever are all the big six or whatever you are nowadays or eight or 10, whatever you are. So I don't really get too involved in this, but are you all going to, is it anticipated you're all going to be working from the same hymn sheet, if I can sort of put it that way? Yes, yes, very much so. So the FRC are now the shallow system leader in local government audit, and they are working in conjunction with the NEO to issue guidance to auditors, both in terms of if audits are going to be disclaimed, which is looking quite likely that Chirwell's will, what is the amount of work needs to be done by an audit that's going to disclaim an opinion, and then for an incoming audit it's a clear guidance in terms of how we get assurance over balances, and looking to, for the system to recover ultimately, guidance as to how, because a disclaiming opinion in one year is likely to lead to a disclaiming opinion in the future, is how we get out of that position and gradually unwind the position so that we get to a clean opinion being able to be issued, which is obviously where we all want to get to. I think it's very helpful, and I don't want to, you know, sort of get more contentious or whatever. I want things to remain non-contentious, if I can use that term. Hopefully that will happen across the board. I think I have a question from my Vice Chairman, Councillor David Rogers, please. Through you, Chair, a question for Mark. I'm looking at Appendix 1, Section 4, Fees, ISA 315. Do you have any idea of how much the material in the statement of accounts will actually cost, and also the group audit procedures? Is there a ballpark figure for that? Is this actually a question I should ask in a public forum? I'm just intrigued to see that there's a headline figure for the PPA scale of fees, but then there are some blanks there as to what else we might be on the hook for. We don't have an estimate of those at this point. That will be in part, so any additional fees above the scale fee is set by PSAA, so that's not a fee that is set by the External Auditor. Likewise, any additional fees also have to be agreed by PSAA, and as a new auditor in the sector, PSAA has set up a session to work through how that process works under the new contract. So I think what we'll find for all the plans is that no amounts have been set on additional fees at this stage, because under the new contract, the finances work are slightly different, as you'll probably appreciate if you compare year on year. So we can't confirm at this stage, but as soon as we're in a position to confirm that, because any proposed additional fees would need to be agreed with management and confirmed with those charged with governance before they go to PSAA. So we would be coming back to this meeting to put our proposals to you once we've got that confirmed. Thank you very much. Thank you for that question. It's a very good question, and thank you very much, Mr Bartlett, for your helpful answer there and to the answers to the other questions raised. I don't know if any other members of the committee have any questions. Sorry, I do apologize. Lisa Russell, please. Thank you. Just a quick question. Looking at your audit timetable, my question is around the interim audit work and the early testing. Has that been started? Yes, we have made a start to some of that work. The council's offices have been providing information to us. That's something that will continue to probably, that probably extends through into June in terms of that timeline, in fact. Thank you. Thank you very much, Mr Bartlett, and best wishes to your colleague, Craig Sullivan. I think you couldn't join us tonight. So I think unless anyone else has anything to say or to raise, we'll just sort of proceed briefly now to conclude this particular item on our agenda. Thank you again, Mr Bartlett, for joining us. So this committee, vis-a-vis this item 12, is invited to note the external audit plan for 2023 to 2024. Can that be noted? Agreed. That's noted. And thank you very much again, Mr Bartlett. You don't have to remain with us if you don't wish, and I'm sure you've got more interesting things to get on with, but thank you for your help again. Thank you. I'll hold on for the final item. We're nearly there, I think. I think. Famous last words. So agenda item 30 is the work program for this committee moving forward. It's pages 135 to 136, a quite short agenda item, a short bit of reading. Any comments, observations? No. Oh, sorry. I do apologize. May I turn to my esteemed colleague, Joanne Kay, to address the committee on this? Thank you. Thank you very much. So our next meeting is the 17th of July, to which we will bring the risk monitoring report for Q4 of March 2024. We'll have the counter-fraud work program, the treasury management update for quarter one of 2024-25, the annual report about the support we provide to subsidiaries, the draft statement of accounts for 2023-24, and we are also hoping to bring some treasury training from our treasury advisors link. Thank you very much indeed. Does that announcement raise any questions or queries of this committee, please? No. Thank you very much. Are we allowed to move forward, Tash? Yes. I have permission from Tash, so that's good enough for me. Now, I think I could be caught out for here, but I hope I'm not going to be. Item Agenda 14, urgent business. I have a little supplementary pack here in my right hand, which is entitled urgent business and supplementary information. One of the items, I'll be guided by those, the powers that be here, one of the items refers to the agenda item 4, which we've, I think, discussed previously. Good. There is, however, effectively a new item 14. It's the prepared by the interim head of legal services who's with us. It's the whistleblowing policy, which is, as I say, set out in a separate document. And I invite members of the committee, if you haven't yet had an opportunity to do that, to read that, to do so. And if I may pass to the officer Shaheen Ismail to just introduce this item. Thank you. Thank you, chair members. I'll be brief. Hopefully, you've had a chance to read the revised proposed policy. It's timely to review these things, especially now that we have very tell who are also listed in the policy as a potential source for any whistleblower to go to. There's no requirement to have a policy of this nature, but we, as officers, recommend we do have one because there has to be a mechanism to report this sort of serious wrongdoing in a public body. And to set out for anyone who does so the legal protections they get not to suffer any detriment for having done so. So that's why we've brought this policy forward. We're calling it a whistleblowing policy compared to what it used to be called, which is confidential reporting, which is a little bit less apparent and obvious what the policy aim is. So the reason we think we need one is to really demonstrate the culture that an employee can feel confident to raise serious concerns and that we as a council are open to knowing about and dealing with such serious matters should they arise. So the policy itself sets out who can raise such concerns, how they can raise it, what the council will do, and how it will treat whistleblowers. So with that, there are four recommendations. First, that you approve the policy. Second, to move ownership of this policy away from the HR suite of policies to the monitoring officer, who's your most senior officer charged with lawfulness and lawful conduct. I think that just demonstrates the seriousness with which the council hopes to look at these matters and that should there be any whistleblowing reports that we bring suitably anonymized reports back to so you can see what's been reported, how it's been dealt with, again, helping you and informing you about your governance obligations. So with that, if there are any questions, I'm happy to take them. Councillor Ian Middleton, please. Yeah, I just really wanted to clarify. I haven't done a side by side check of these two policies. I just wanted to really clarify, is this just a rebranding of the confidential reporting policy or are there any standout changes that we need to be aware of? There are no standout changes, just simplification of language, clearer lines of who does what, what the implications are, so no significant changes because the law hasn't changed. Thank you very much. Any other questions or observations, clarification? Thank you. I think the way forward it, subject to any being advised otherwise, is to take the recommendations as a whole. Yeah, so the recommendations on page 5 of gender item 14 are 1.1 to 1.4 inclusive. Do I have a proposer, please? Proposer is Councillor Ian Middleton. Do I have a seconder, please? Councillor David Rodgers, thank you. And does everyone agree? Thank you. Finally, I think Councillors are asked to request to collect any posts from their pigeonhole in the members' room at the end of the meeting. Do I have to announce the date of the next meeting? No. I think we've heard reference to it already. Thank you very much for your patience, fellow Councillors and independent members of the committee, and have a safe trip home. Thank you. Thank you.