Transcript

My name is Councillor Arjun Mittra. I'm the Chair of the Governance, Audit, Risk Management and Standards Committee. Can I welcome all members of the committee? Please note that this meeting is being webcast by the Council and those present may be picked up in recordings. The vast numbers of people in the public gallery. Can I please remind members and officers to use the microphone when speaking by pressing the middle speaker icon? Please also note that we are currently in the pre-election period in advance of the burnt oak by-election on the 13th of February 2025 and 6th of March. During this time, Auditory Council of Business can continue, but members are reminded not to refer candidates or parties in relation to the upcoming elections. Thank you for your support. Thank you for your support in ensuring that these principles are respected at all times, especially on what is the Standards Committee. Although she's not here tonight, can I welcome Councillor Kath McGuirk to the GOMS Committee? Unfortunately, she's not able to make it due to family reasons, but I'm sure, I'm sure, well, hopefully. Can I thank Councillor Simon Radford for his contributions to the GOMS Committee, which were always very helpful, and it was all listening into the recording of this meeting. Can I also note that item number 12, the Treasury Management Performance, the number of meetings, dates and times of them, so I will carve some time out on the discussion on the Forward Work Programme to disclose then, if you'll kindly indulge me. Right. Turning to the agenda, item number one, the minutes of the previous meetings, can I just note that there are, which is pages 13 to 15, I will go through the action log, which lists the action points from the helpful update. Agenda item 8, which was page number 24 for Q2 24-25, the action was members held discussions regarding financial risks associated with Brent Cross and agreed that they should be continually reviewed and fully scrutinised. Thank you. The next point is item number 11, page 4, internal audit exception recommendations report, program 22 to 26. The committee agreed that it should recommend to the member development steering group, but for our committee, it's for us to decide what training is mandated. So, anything, anything, anybody wants to raise from, or shebang of words that I just read out? No, great. There isn't an action log from the 12th of December, though. Excellent. Absence of members, as I mentioned earlier, Councillor McGurk has some family commitments this evening, and sends her apologies. Chair, on the topic of absence of members, sorry, do you want to finish your sentence first? Sorry? Do you finish your sentence, and then I'll interrupt? No, no, go ahead. On the topic of absence of members, are we looking for a second independent member to sit on the committee? Yes, we are, and I think that's for governance to recruit. Can I put a name forward, perhaps? Oh, I think I know who that name is, but I'm not sure what the correct format to do in this committee, because it's a recruitment process. Sorry, I think we're taking it under consideration at the moment, whether when I stick with one, I suppose it depends if members have got a strong feeling. Are there any recommendations, so we might only need one, are there any recommendations as to numbers, or are there any recommendations as to how many independent members should be sitting on an audit committee? Most councils have one, to me, with these views and recommendations, and I will pass those on to those considering the decision. It's not my decision. Maybe he's got any interest? Okay, we're not interested. Excellent. Item number four, dispensations by the monitoring officer, there are none. Item number five, deputations, there are none. Item number six, petitions, there are none. Item number seven, public questions and comments, if any, there are none. Item number eight, quarterly risk report, Q3, 24, 25, Stefan, is on one. Hello, do you want to take some introductory remarks and then members may have some? Yes, yep. Thank you, Chair. Hello, everyone. I'm the performance and risk manager. I'm here to present the quarterly risk report for Q3, which covers October to December. This report focuses on our strategic risks and high-level service risks, which means service risk scoring at 15 or above. At the end of this review period, we had 195 open risks. 25 was strategic level, and of those, six were scored at a high-level. 27 were high-level service risks, and this makes 33 high-level risks in total. A summary of those risks is provided in the covering report, with more detail included in the appendices. Appendix A contains a detail on all the strategic risks, and appendix B is for all the high-level risks. Each risk has an ID, which is a six-character unique code of letters and numbers. If you do ask questions about specific risks, if you could also refer to the code, it makes it a bit easier to locate it in the report. And I'm happy to take questions on specific risks. However, given the breadth of this report, it's likely I'll need to take them away as an action and consult with the relevant risk owners. So thank you, and I'll... Yes, questions? Okay, I think we've... Yeah, there we go. Do members have any questions? As has just been said, it's a very broad report, not all the relevant... Thank you, thank you, Chair. This is actually a question for Richard. I've only ever sat on the audit committee of Barnet Council, so I'm unsure as to where we sit. Having 195 risks obviously sounds like a lot. It's good to see that over the last 15 months or so, that number's slowly going down from about 210, plateauing in the high 190s. It doesn't seem like there's a... We're trying... Sorry, let me rephrase that. It seems like we will always have high 100, 200 risks that are at any given time being reviewed. Do you know how that compares to other local councils and whether that seems excessive or within some sort of mean? It depends on your format, but then there are service risks, and they're often a great mixture of things, really, as service risks. On the child Cricklewood Ward, than there is from Cricklewood Ward to the River Thames. You know, we are absolutely... Exactly. Well, you know, very good at geography. You know, and that presents challenges. You know, we run the gamut from Zone 2 to Zone 5 to be prepared and think very deeply about all of those risks. I'm not suggesting that a large number of risks is a bad thing per se at all, actually. If anything, it shows robust review. So, I think it's just worthwhile understanding how much effort can be placed on each one if we have, you know, 200 plus. I agree with that. I think Deborah wants to come in on that. Yes, thank you, Chair. Just to add, we do take a very robust approach to risk management. Stephen and the programmes and performance and risk team sort of hold the register centrally, but all services are involved in that regular review process. And the team does also do benchmarking and comparisons against other London boroughs. I think we're basically on a par with that. And there are regular audit reviews and external reviews of our approach to risk as well. So, yeah, I think I think we we take the view that we'd rather identify too many risks rather than identify too few and have things come up and bite us that we are not prepared to respond to. I'm just counselling. Are you able to come back on that or you're not able to? Sorry, I'm just trying to locate it. Yeah, one that increased strategic risk. Yeah, so the strategic risk that increased was STRO, I think it's 2.6, and that's in the appendix for strategic risks. Yes, the title of that one is delivery of corporate plan. Yeah, that's the one. That's the one which increased. OK, OK, thank you. And if I may, so are we saying that these six high level strategic risks are the biggest risks that the council is facing? That's just a broad question, right? Are we saying by listing these six high level strategic risks that these are the six greatest risks that the council faces? OK, all right, I'm kind of questioning, and I am not an expert in this area, but I'm a city member, so I'm questioning how environmental sustainability and the funding of net zero. And that's where you get your rating from. I don't have that detail in front of me to know how the levels were, because obviously, depending on the impact, the risk would be higher. It's whether the risk is actually emerging into an issue. Is it a risk or is it an issue? So we'll have to come back to you on that, because I don't have that detail to hand in front of me. It's obviously a really detailed spreadsheet, but probably what would be more accurate to do would be to take that away, let the team look at it, and relate to the committee. Yeah, that would be fine. Yeah. We have our first item for the action. It's just the financial ones are obviously. That is our highest rated risk. That's 25, and that's the biggest, highest score you can get. Understood. Understood. And obviously, you know, the financial risks are those that are on the near site, right? That's the near fight that the council has, whereas the environmental sustainability one, albeit an important issue, is not necessarily the near fight that we're facing at the moment. That is quite a long, long-term risk. And it's not rated as high as the financial risk. Understood. But it is within one of our highest strategic risks. It is in the top six, but it's not high. Yeah, it's in the top six, which, you know, is quite high. But we can take that away and have a look at what that rating is. It's fine. Look, I don't question the rating. You know, it's been assessed properly. I just, it's more. Can I bring Deborah Hund in? Thank you, Chair. Yeah, just to add to that discussion, you know, within our risk framework, we do need to consider those longer-term risks and impacts. And likelihood of things happening. So, so that, that is what we'll be playing in to that sustainability, environmental sustainability, the potential long-term impacts of not taking action now. So, it is more of a slow burn. But happy to bring back more detail, circulate more detail on how that risk has been assessed to committee members. I don't think that's necessary from my side. But if other committee members think it's necessary, I don't, I'm always reluctant to add to more reports, more focusing on officers. But look, this can take a view on that. You've answered the question as far as I'm concerned. So, I'm trying to understand within the financial risk, which is higher, the risk of overspend or the risk of uncollected debtors and uncollectable debts. Well, I think the answer at the moment is very much the overspend. Yeah, we, we, I think we've got a good story on debt recovery and things like that lately anyway. So, the answer is the overspend, for sure, as members have said. And there is a story on debt. How good that is is that it's a subjective judgment, in my view. Because, you know, high debt doesn't help us from all sorts of, from all sorts of categories. It actually conforms in the overspend forecast position. But in answer to your simple question, it might. I always, as an accountant, I'm going to say that spending is in the control of a budget holder. But I would also concede that others will say that it's at demand and forces outside of their control. So, as ever, there's not always a straight yes and no. But as a CFO and a finance officer, I have this view that holders need to contain their spending within their budget. But we could go into a long debate about this, councillor, if you want. I mean, that, that is an argument put by those that manage demand-led budgets. Okay. And certainly, if there are more clients, there are more costs. But it isn't statutory. The amount that any council spends on statutory services isn't statutory. The service itself is, so that, in my view, and I'm being careful to say it's my opinion, there has to be part of the debate about how you can control costs, even if they are demographic and growth pressures. There has to be a way of still doing your best to spend within the envelope, even if your spend goes up. Sorry, numbers go up. It could be a long debate about this, because others will say, there's nothing – I don't want to sort of tell you that. That's my answer. If the head of adults or children sitting here, they would say something else. Okay. Recommendations on page four are, number one, that the committee – the completion of the 20 – sorry, page 17, the committee note the status of the council's strategic and high-level 50. Thanks, Chair. I hope everyone can hear me. I'll just give a – I mean, I hope everyone's read the paper. I'll just give a brief overview. So, of all, it has been signed off by BDO for years 21, 22, and 23. There were, as you can see through key findings in the appendices, there were subsequently corrected – well, they were corrected in subsequent years, and some new processes put in place for future years, and Grant Thornton will be in the next few weeks, and will be probably at the next committee. The housing benefit certification has also been signed off. Thank you. This item is the Q3 Internal Audit Exception and Progress Report. It sets out the progress against internal audit recommendations were completed to date on the Internal Audit Plan 24-25, the 31st of December, 2024 due date. During the period 1st of October to 31st of December, the Internal Audit Service completed 17 review three for quarter three, 20, 24, 25. There were two limited assurance reports issued during the period. The first is a school's audit that has one high-risk finding, which relates to budget monitoring. Four step-down places, including paid capacity within London, is grant-funded by the Department for Education. Internal audit observed several issues that require resolution, as they are not conducive to moving the project for delivering the overall outcome, relating to the working relationship between the DFE and the Council's Capital Program Team, and changes to DFE expectations during delivery, leading to lack of clarity and project delays. On the 31st of July, 2024, the Council team met with the DFE and agreed a project pause to agree a way forward. While the project remains on pause at the moment, the Council and the DFE are working together. During Q3, the internal audit also undertook follow-up work on 17... I wondered, actually, while you were speaking, Adam, when did the pan-London Children's Secure Home project... I guess when was it? As in the internal audit working program? It would have... I presume it would have been at the internal audit... Not something I recall. If it was there, it was there. We can check back, because sometimes we do add audits on throughout the year, and obviously... So I can check back in the meeting today and let you know. I thought that would be the case, and I think that's an interesting observation. If it is something that has been put onto the work program as a result of some... Things were continuously... I don't know if Adam wants to... Yeah, no, it was just to say I pulled up the plan, and I can see it was on there. Yeah. It's a pan-London project, so it is not exclusively a bonnet project. The name of the internal audit, the provision audit type was Secure Accommodation. I'm going to ask Richard to come in first, and then... My comment is about that particular item. Priorities on your internal audit point, in as much as the home closed within three years, money had to be paid back to the DfE. That's now been dealt with the DfE, have climbed down on that. I think at the last count, 30 London boroughs had signed up to the project, and we did it by direct negotiation, so I'm surprised Barnett didn't just go back and negotiate. Just a quick comment in response to that, Richard. It may well have been because our children's director was the lead director on the project. We're very lucky that our GT colleagues appeared or just arrived, guys, so you have just about made it via the skins of our teeth, so all welcome. I just want to say something for Nick, and then we'll hand over to AJ. I was going to make a facetious comment, which is to say, excellent timing, unlike your predecessors. Yes. Yes. I'm going to... Nick's going to introduce the report, but something I said earlier on. AJ, I hope you're just listening to this. The point about the potential of you being able to give a... Even though it's a disclaimed opinion, before backslash date, could you explain your context and ration around that? Because I'd understood, but I now have been corrected on this. You could maybe have done that without, please. Thanks. Thanks. I'll let AJ and George speak about the detail. And same as what was presented at GARMS in November, which you've noted, the key risks are other land and buildings and valuations, the school's cash residence, which is... 24-25, and the addition of the AGS or the annual governance statement to give us a bit more context. Thanks, AJ. Thanks, Nick. Thank you, Chair. Nick, you've already done a lot of legwork for me by covering the updates. Apologies for coming late. We run into some problem with the tube, but we still may have time. I mean, not ideally, but sorry about that. So, a quick update. We take the report as read. It's the same audit findings report that we presented last time with a few tweaks and updates. For example, we were progressing the work on a minimum of the reserves provision and capital financing requirement, which we have now concluded on, and we have not identified a material error or mistake, so that's a positive. We have also concluded on various other areas where we've just said that we have completed the work. So, the report is just updated for those things. The major issues that we had identified previously remain the same, and we now have set up meetings in our diaries with Nick to plan 24-25 audit. Just coming back to the point about the signing of accounts, we couldn't sign until the previous years are signed off by the predecessor auditor. There are certain quality metrics that our firm follows, so it's not just about the engagement lead. You wouldn't be able to sign until the previous audits are signed off. Quite similarly, if you think about signing an audit when the previous audit is not signed off, you are leaving the risk that, although it's a disclaimer, that there is a risk that there might be some reporting requirements, not necessarily an error, that may go unreported or undetected if those accounts are not signed off. Therefore, we have to wait to have an idea of when that's likely to be. Our work, which will help us sign a disclaimer, the preparations are almost there or thereabouts, so almost there. As soon as your predecessor auditor sign off the accounts, we should be ready to go in a week's time. Can I ask you one, please, AJ? If BDO were here tonight and they've said disclaimed opinions for the outstanding year and we were able to tell you that now, would GT be able to give a disclaimed opinion by the backstop date? There are certain processes. So, for example, it's not just about giving an opinion. The accounts have to be approved by the committee. We should be able to give you a management representation letter and a draft audit opinion for you to read and review. And then once you're happy with that, that has to be in an audit committee. So, we would expect an audit committee, if the plan is for BDO to sign off before the 28th of February, an audit committee to have planned and organized before 28th, and then you would have to sign those set-up accounts to US Health first, send it over to us, and then we should be able to sign. So, there's a series of processes that need to be... Yes? It's possible, I think you're saying. Yes, it is possible. So, if we are trying to aim the 28th of February, that is doable. The 28th is doable for us, the backstop date. So, you've had the... You have obviously seen the opening balances and the balance sheets in conducting your audit. So, what are the chances that a material difference around, at this stage, what you have done, if signed? Thank you for the question. So, it is not the work that is holding the signing off. There's an ongoing pension legal issue that needs to be concluded, and the outcome of that would mean that the management have to pass some journal entries to correct that. So, once that is done, then the accounts need to be amended, and the opening balance areas, we have not looked at the opening balance as part of the plan and the legislation. The opening balances get disclaimed. So, the risk is not that we have not looked at something and suddenly we find something which is material. It's the process that we have to follow. The previous audits need to be signed. The pension issue needs to be resolved. The corrections have to be made and presented, and we will be happy to issue our opinion. Thank you. Thank you. Councillor Prager. Councillor Prager. Thanks. Mike, just a very small technical question. Nicholas, you mentioned that you're only just implementing IFRS. That happened over the last five, six, seven years. Yeah. So, initially there was, I think because of, Adrian George might be able to tell us a bit more technically. So, initially it was supposed to be the same as private sector accounts. I can't remember, 29, 19, 20 or 20, 21, but because of various issues and complexities and it's just taking time and it just keeps getting moved back. I don't think, Adrian George... Was there not a requirement to have implemented it at some point? Yeah. I know the NHS did it a few years ago, but that's what I'm asking. The statutory requirement for the local government was changed the 1st of April 24th. So, we're in line with that. Good to know. Keep on top of these bulletins, clearly. Thank you. I noticed you were shaking your head, Kevin. So, my question is, are you signalling disagreement with the interpretation of the rules? Because they've not been audited. It doesn't get much worse than a disclaimer. I know there'll be answers to that. But, you know, in simple logic, if they've not been audited... Can we ensure that it doesn't go beyond 28th of February? So, like I mentioned, there are a series of events that need to be organized by the council for the sign-offs. There are four years that are not signed off yet. All of these four years, not just the council's accounts, but the pension fund accounts need to be signed off by the producer or auditor. The current year's 23-24 accounts have to be amended for the pension issue. That has to be signed off by the Section 151 officer. Once that is done, then it has to go, our draft opinion has to go, if you can arrange a special audit committee before 28th. And if you think that you can do all of that between now and then, I think we can make the 28th. But it depends on... It depends on organizing so many, you know, all the series of events in order for us to make the 28th. Can it go beyond 28th? It can go beyond 28th. But it will depend on various other factors. This doesn't sound possible. Thank you, Ajane. You're right on what you've said, but it's not possible. It simply isn't possible because of the issue around the pensions issue that we've talked about at full council. We've got a whole host of things, hurdles to jump, in relation to going back to the pension fund committee. I mean, I guess, you know, the question of Ajay would be, do you not think that it is going to be a disclaimed opinion? I think there are a couple of strands to that question. So, first of all, it is not an engagement leads decision. It is a firm's decision. If we take a decision, it will set a precedent across all the orders we do. We do about 150 councils. And I wouldn't be able to give you a definitive answer now without speaking to our responsible individuals and, you know, people who... I don't know. Okay. Okay. Right. There have been no further exclamations, questions or shrieks of pain. Do you want me to read them out or...? Yes, please. Okay. So, the GARMS date that had been scheduled for the 17th of September last year has moved to the 17th of September to accommodate the finance report being presented to OSC. So, that was, unfortunately, only three counts. So, we've... Yeah, we've... I mean, it's always lovely to spend time with you, but... Yeah. So, I hope you will accept my apology. Can I... Can I come to that? Let's just go through. No, let me... The 11th of June meeting has been moved to the 21st of May. Come to that. Okay. The two future meetings that are currently scheduled for this Council year are the 10th of February and the 21st of May. Yes. Right. There in my diary. Well, let's... We'll just come to the 10th of May, because I do understand the objections to that. There have been two additional meetings that have been stuck in. One on the 12th of December last year, which was for BDO and Grant Form in 21. At 21 and 22, 22 and 23 by the government backstop dates. So, that was why that one was stuck in. The 10th of February meeting is due to consider the Treasury Management Stratocort Council. And I think we're about to discuss the agenda for the next scheduled option is not to table an additional meeting. So, I will try and take that on board as much as possible. But if there... You know, those are annual reports that have to... Some of them are annual reports. I can only... I can only... I'm sorry that you've had very short notice of the 10th. I think we only really... Personally get a bit wound up when extra meetings go in and they get changed. But, you know, that's a fact of life. But, you know, the reason I asked for an update on summary of all of the meetings that have either been rescheduled or new ones that are kind of beginning to lose track of when this committee meets. And as I said to Georgina yesterday, I can't attend the one on the 10th of February. But what is happening, Jessica, is that this is just a combination of, first, the new Cabinet arrangement and probably, you know, in fact, I've contributed to this. But my point is that, you know, it does feel as if the proper functioning of this, you know, scrutinising committee... We won't have to keep rescheduling meetings. There may also need to be a wider discussion with us as a committee about whether we have enough meeting to tear out there. The idea of having more meetings. But I'm very open to that personally. And if we need more, we need more time. We definitely do need more notice to members. We're going to be able to put in... On that, again, just like the SIPP for bulletins, I also haven't read front to back the constitution that members should receive in advance of a meeting, because about, what, two weeks' notice seems quite thin to also publish papers with sufficient time to read them, et cetera, et cetera. As seldom as possible. Sorry, can I just ask why there's the 6 p.m. meeting? Is that in advance of another GAMS meeting at 7? Why is the meeting called for 6 p.m. on the 10th? I think... Sometimes we have a meeting. Yeah. But what I'm asking is, are there members that cannot attend the 7? If it's at 6 p.m. Essentially, if it's at 6 p.m., I'm sending apologies. Is there a reason why our GAMS meeting can't be at 7 p.m.? Well, I think it's clashing with another meeting that's on that. I think it's... We have the room in the council. We can check, councillor, but I assume it's because it's clashing with another meeting. I assume it's because it's clashing with another meeting. Georgine is going to check. Is the issue with another meeting the fact that there's a space issue, an office issue, a member issue, a governance issue? We're going to check. We're going to check. I don't know. Fine. Varnix licensing in general purposes at 7, but that's been cancelled. So, if we can move to 7, I'm sure that's easier for many of us. Yeah, can you leave me to just check that? Because my understanding was there was another meeting that night. I think that was also... Yes, but please ensure you provide five working days notice. Sorry, I can't... Please provide us with five working days notice. Yes, I want to do... Well, look, you know, as I say, I don't particularly want us to go down the route of short notice for meetings. It is a very particular thing that we've had to go through this year. I'm hoping next year we do return to regular order and the offices are working very hard trying to cope with our workload when we know that there are periods of the year. We get a lot of things in at the same time as well. So, I think we need... I think we need... I think... I think we over ripple. That's... Instinctively, that's my sense. It depends. It depends. I would say what I find is we have some committees with a very slim agenda. And some can be a tent with me because I know it's going to be up until 10pm. It's back to back. So, if there is a way of officers reviewing how those can be spread, although obviously there are requirements throughout the year, quarterly updates, that would be appreciated. It's not what to ask about. Exactly. No, I agree. I think that's... That is partly why, you know, we do look... We do look to pair them with other meetings going on September and put two items on it. So, you know, it's very frustrating. I do take on board everything you're trying to say and I will... They do it out of pure love. And... And... And... They do it out of pure love and duty. And, you know, it is a lot of extra work for them. Item number 15, any of the writers, the chair decides all right. There is one very urgent item that I do declare, which is that this is... He's actually bought a box of tissues. That is how... That is how thoughtful he was because he knew I would absolutely dissolve to a puddle of my own tears, tears, grief and emotion. So, Kevin, you know, I don't know how we would have survived the last year on this table. I'm out of respect for you. You know, we all found it valued your advice, your knowledge and expertise from years and years of... Not that many years ago. Some... You know, a short number of years of immense expertise around local government. You know, you've very much been a mentor for us. And... Just wanted to say... I was going to stand up and give you a standing ovation, but, you know, the old... The old knees have gone through me. We have gone around as a committee and we have... We'll find a little card to say thank you. Let me... What's... Thank you very much indeed. I'm surprised by that, but I'm delighted. And it's an honour and pleasure as well to work with Barnett my second stint. We've had some difficulties, as you all know, in this last 12 months, haven't we? No, Jessica's not the difficulty. Yeah, I don't remember the difficulty. We have some challenges and difficulties, but with the professionalism shown by officer colleagues and members as well. And, you know, I think members have responded extremely well to this. I didn't quite know what to expect when you all heard about these things. But I'm grateful for the way that you have reacted to it as well and responded to it in a sort of professional way. And that could have been different. I... Like a toddler, I was on the floor screaming. But genuinely, thank you very much indeed. And I hope I can help Barnett sometime again. Thank you. Well, thank you very much. We could turn this into an open mic session, but... Thank you. But I just want to... We will miss you. Really, you know, we're so grateful for everything and the leadership you've shown during difficult times. I'm going to need the tissues soon. I... I don't have anything else on the agenda, unfortunately. Thank you. There I go... That's right. I'm sorry! Yeah, there you go. I've got to be my lucky part. Thank you, свободist here. Well, thank you. to door you only for being open to you, clear the word, play the word, catch you,

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