Transcript

Nothing will be recorded unless you actually use the device in front of you. And when you have done so, switch off. Members have read the reports. We really have read these reports, probably more so than any other committee meeting I've known recently, considering how many pages there are. Well done, everybody. Nonetheless, introductions to the report need to be as brief as possible. The main focus will be on members' questions, and we do have a few. Right, some formal matters. Apologies for absence and none, so no substitute members. Any declarations of interest? No. Right, let's move on then to the minutes of the previous meeting. If you're happy with those, those will be signed in due course. Well, end of the day, actually. There's a couple of matters, no, one matter arising. I'll just draw you to page 8 of PDF. Throughout this meeting, I'll be referring page numbers to the PDF page numbers, which are completely different to the page numbers that you've got in the 1st, 2nd, 3rd and 4th dispatches. So, you'll leave the meeting this evening exhausted from having to oscillate between different sets of paper. Do you have printed copies if it's helpful? Oh, oh, if anybody wants to get a consolidated copy. Actually, that's not a bad idea, you know. No? That's true. You'll just have to read just all your... Yeah, the whole agenda in the sequence that it's supposed to be in. Any order, then? Yeah, yeah, exactly. Exactly. Yeah, yeah. There's nothing in there except possibly the minutes that you don't already have. It's just that you've got several items in the 1st and 2nd dispatches, and then you've got items which are in subsequent dispatches. So, you'll have to... Good, good. It's like a skiing holiday. You'll be slaloming from document to document, yeah. Okay, good. Right? It's like a skiing holiday. Yeah, absolutely. Yeah. Yeah, most people, it's all blue wine and beers, but for me, it'll be slaloming, actually. Right, just going to the minutes of the previous meeting, I'm just going to take the page 8, the 5th bullet point, and just say that on that matter, the leader has suggested that this will be given consideration in May, rather than in the days immediately ahead of the Budget Council meeting later this month. Right, let's move on, then, to A5, verbal financial update. Dave, any surprises you want to tell us? If there are any conspiracy theorists watching this live or on recording, not a single word you just said has ended up on the record. Do you want to repeat what... I gave an update to the last committee, and I don't think very much has changed since then. There is some one-off income which is a little commercially sensitive, but I hope will come in squeaking before the end of the year, end of just before 31st of March. And I think that, combined with the continuity, which we have yet to use, should mean we are underspent by a fair few million pounds by the end of year. Good. Thanks very much, indeed. Okay, unless members have got any questions, which I think is unlikely. Good. Okay, then, let's move on to item B1, which is the Statement of Accounts. Firstly, just for record, it's worth saying that, as our new auditors, KPMG, have done what I think most people agree is an outstanding job, both on the quality, the extent, the breadth and depth of the audit reports that have been presented to us this evening. We're particularly pleased that this has all been done on time. I think we're also very pleased that we've been able to convene this meeting in an orderly way in the cycle, and in particular that you gave us very good notice that the originally pencilled-in date of the January Audit Committee was probably not achievable. So we're very pleased that we're in the place that we are right now. I'm going to ask, I think, Matt Hobson to just present the covered report before we go into the meet on B1. But, you know, the good news is that the audit is substantially complete. There's some quality assurance review measures still to be undertaken, and that we are on track for production and submission by the due dates with what appears to be an unqualified audit opinion on both the main accounts and the pension fund. And you've also cleared three previous years' related objections. So that's, you know, a very, very encouraging position to be in. You know, would it be that the council was in a fantastic, rosy, healthy situation and a fantastic audit report? We'd all be very, very happy. We're not in a great financial position. We're doing very much the best that we can. But to be able to have auditors attest, we're doing so properly that we're getting value for money across the piece, that there are no concerns, management controls. It's all very, very positive news indeed. So thank you very much for that. So, Matt, do you want to just briefly introduce the covering report? And then let's hear some more. Yes, thank you, Chair. So the audit findings report for both the pension funds and the council and the annual auditors report, which includes the VFM, I will let Rash Powell speak to that. But just to say that on the VFM there are no concerns arising, which is very positive for us. We had two recommendations previously which have now been cleared. So that is a very clean bill of health. But just moving back to the accounts themselves, so this has been quite a long process, which is always usual when you've got new auditors starting. There's going to be a healthy challenge. There's going to be looking very closely at all the way that we do everything, wanting to understand processes, not having any previous knowledge. So, you know, it's to be expected that this audit is going to be very thorough. And we've had healthy challenge from the auditors, but we've worked very well with them to resolve those challenges. And we've managed to get here with 10 days to spare to beat the backstop deadline so that we can actually get these accounts audited and not qualified effectively, which I think many councils will not be in a position to do so today. So as already touched upon, we submitted these accounts within the original deadline, and we've been working consistently with the auditors over a number of months to get to this position. And we've got a number of things that will require adjustments, which is understandable, and you've got new processes that auditors are challenging, the way that previous auditors were happy with aren't always going to, they're not always going to be considered right by the new auditors, so there's a lot more challenge that comes in. And we'll talk about some of those in more detail. The one that the committee will be aware of as we raise at the January meeting was around the value of open market sales, so that is the largest change, which shouldn't be a surprise to the committee, which is around, it affects a lot of different areas, but the highest figure I think is about 31 million, and that required a prior period adjustment, so that's quite a significant note in the accounts that details all of the changes that were made in relation to that, but hopefully the committee are comfortable with that adjustment, given we talked to it last time. There are various other small items that will be adjusted for in disclosure notes, but some of the bigger ones that the auditors will talk to a bit more are around valuations, so we've got some recommendations as well on valuations that we'll talk to in a moment, but there have been a few items that have been brought to our attention around this, including one that's not in here, which is around schools, valuation of schools, where a different rate was used in obsolescence, so we've cleared that up now, and we're happy that we can move forward with that, but that's just one that's not in here, and that's around 1.9 million. We've also got, obviously, the open market sales, and there's another item which is related to the Waste Recycling Centre, which is another amendment that we have put through the accounts, and there's also a couple of other items relating to revenue, so there's misclassification of grants for 2.6 million, and also bad debt provision miscoding for 15 million. Now, that didn't affect any out-term position. It was simply that it wasn't grossed up properly, so it was that the miscoding meant that the net position was correct, but the gross position was not showing full expenditure and income, as you might expect it to do, so the net position is still the same. So those are the main differences, but so I think it's been a good working relation for us to get here, some healthy change, and I think we've got a good way forward to get these delivered in the next 10 days. Good. Thank you very much indeed. Your members will endorse your observations. We've got a set of accounts that show a true and fair view of the financial position, and also I think we're also very pleased to see that, though it's in item B2, the auditor's confirmation of independence, which I think gives us a lot of comfort as well. Most of us have grown up during a period in which the relationship between audit and non-audit work has occasionally proved to be a bit of a conflict of interest, and so having a set of auditors who have no significant non-audit business with us is very comforting indeed. Thank you. Rashmol, do you want to introduce what you think of the main findings here? And just for the record, I should also say that we've had the benefit, prior to this meeting, the short private briefing with the auditors, and we are, I think, happy to say that there are no concerns expressed to us both in private and in public, and everything that the auditors want to tell us is in the written reports. That also is an extremely encouraging thing to be able to report. Rashmol, look to you. Thank you, Chairman. So this report, B2, item B2, so starting on, so I'm going to have to juggle packs, page 303 of the main pack, is designed to help us discharge our responsibilities under auditing standards, ethical standards, and various bits of legislation in communicating to you, as those charged with governance, all the requirements that we're required to report to yourselves. Last year, we produced an audit plan. This builds upon this. You will notice this, it's a draft document, and there's two items highlighted in red. I'll talk to that, and, you know, very much got updates along the lines of what Matt has said. So over on page 306 of the document, we set out the same schematic that we had in the audit plan of the risks. We identified a risk on valuation of land of buildings, valuation of post-retirement benefit obligations, and management override of controls. So I'm just going to briefly take you through each one of those. There's a number of pages dedicated to each of those risks. I'm going to pick out the key elements of procedures that we did and the key findings there. So in terms of the valuation of land and buildings, we brought that up into two key components. Council dwellings, so council homes, you've got 25,000 of those, circa 3.3 billion pounds. You value those using a beacon model. So nobody goes out and values all 25,000 homes. You break those into broadly 600 different beacons, and you associate a house or a flat with each particular beacon. You value that beacon, and you apply that value to the rest of the properties in those groups. Different beacons have different size number of properties in each one. You get 20% revalued each year, which works on a five-year roll in reprogram, and the other 80% you apply indexation. So we've completed our work over the ones that were valued in year. At the point of writing this, we had a little query around indexation, which around the indexation rate applied to one particular beacon. I think we're going to get some evidence tomorrow that confirms that's not an issue in terms of the reason why that beacon group has been valued at a slightly different rate is because of something in the locality. So that will disappear as an issue. If I'm not comfortable, the extent of that issue would be less than materiality, so it wouldn't stop me issuing the opinion, but I would have to raise a point in the memo regarding that. Just on this point, a number of members prior to the meeting indeed asked what is beacon value. Can you explain that a little bit more clearly to us so that we understand the concept? So, and I'm sure officers will step in if I get this wrong, but basically you've got 25,000 houses. You've broken them down into 600 categories, broadly 600 categories, isn't it, in terms of beacons. So maybe all that split on the size, number of bedrooms, the type of house, type of house or flat, the type of build, and also the geography of that because those are all unique parameters that we say. So all those houses should broadly be valued on that basis. All those houses and those, all those apartments and those. So the part of the work we do is, you know, making sure you've not got a four bedroom house that's pretending to be a two bedroom apartment because you're probably going to have some valuation issues then in terms of you trying to apply a value for a four bedroom house to a two bedroom apartment. So we do some work around making sure the right properties are in the right categories. And we did identify some small number of errors on that, and hence we've got a recommendation. You then, of those 600 that you've got various number of properties, 80% of those, you get a valuer who will look at one of those and apply that value to each of those. The other 80% you apply indexation to, and that's absolutely appropriate. You know, that's the SIF code allows that type of valuation methodology. We check to make sure we're happy with the indexation rate that's applied. We're happy that if you're saying that two bedroom apartment was valued X hundred thousand pounds last year, and this year you're saying it's gone up in value or gone down in value, we're happy with the comparatives you've used to value that. There's other things like that because these are social homes. There's a location factor, a social housing discount factor applied. We're making sure the right factor has also been applied. So it is quite a complex and requires a sophisticated bit of data behind that, and our job is about making sure that data is all accurate, and we do have a recommendation in the report around the rigour around some of that data in that because we did identify some issues around maybe things were in the wrong category or things didn't quite work in terms of data. Not major issues, but just minor issues there. So that's quite a, you know, the word beacon, so that's basically the beacon valuation method. I think for members' benefits, and I'm just looking up a definition from the government here, it's a representative property in other words. So you group together all the properties into 600 types or whatever, and then you choose in each of those groups something which is representative of that, and that's the one that you value. And you apply that to the rest of them. So that's why it's important that you've not got a whole load of four-bedroom houses pretending to be two-bedroom apartments because that could throw the value off. Okay? So subject to that one issue which is never going to be material, you know, we'll be in a position. But there's some recommendations. We then looked at other land and buildings, schools, leisure centres, and so on. We looked at the, again, you get 100% valuation done for those by your external valuers. We looked at a number of those on a risk basis as you'd expect. We identified one property which Matt has already mentioned resulting in a £12.6 million adjustment to do with the waste recycling centre. That's because the wrong gross internal area had been used. So again, pointing to the data that, you know, the data that's given to the valuer is really important because ultimately they apply, you know, a rate per hour, a rate per square foot for that and so on and various other industries. So again, we looked at that. We also, and again, the reason why this is red, there was an issue around schools which Matt pointed out. We found one school which had a particular obsolescence factor applied to it depending on the age of the building but it just so happened the school was rebuilt more recently on another site and the old data had been used so that's the obsolescence factor was wrong. So what we've asked for reassurance on and officers have speedily turned this around so thank you for that is, well, is that just a one-off or has it happened on other occasions? So the error from that one school was 6.4 million. Officers have identified other inconsistencies with that data but they go the other way so actually your net difference is now 1.9 million which Matt mentioned and will appear as an uncorrected audit difference in this report once it's updated but again it just points to I think something around the data the importance of this data and making sure that data's right which is what one of our recommendations points to. So subject to us checking the spreadsheet for the school us getting that indexation we're comfortable on that and it shouldn't lead to any material in the statements. There'll be some tweets to this report which we'll share with you post-audit. Second significant risk is again valuation of post-retirement benefit obligations so Yale GPS pension scheme. Again a lot of assumptions used in here a lot of data as well it's about making sure the right data is used it's making sure assumptions being applied and over on page sorry page 314 of the pack we have identified which won't be very helpful if you're looking in black and white because it's colour coded but on screens you'll be able to see we've looked at each of the key assumptions on page 314 those being discount rates CPI inflation pension increases salary changes mortality and so on and other demographics and we're broadly happy with the assumptions there's one that pings CPI slightly gives a slightly optimistic reading but it's with it's not going to lead to a material misstatement so we're satisfied with that we ask archery to do that work for us and it's not uncommon that there's differences between two sets of professionals but it's within that range that we're comfortable and we can sign off on that not leading to a material misstatement the final significant risk is regarding management overrider control so this is a standard risk you know we're not you know you probably see the word fraud in there and possibly get worried by that but you know it's kind of you know management are in a unique position and you know and if this or wanted us could perpetrate financial statements fraud we're not saying that's what happens but we have to do a certain amount of work against that we look at estimates we look at judgments we're making sure things are always on the optimistic side or so on we're looking at journals because that's a key way that financial statements can be manipulated there is a control deficiency which I've previously talked about when presenting the audit plan around your journal control system and segregation of duties which I think you've been long aware of and new financial system should help hopefully rectify that so we build some high risk criteria you know what are the journal directions we would consider unusual for instance you know who are the people that I would consider probably shouldn't be making journals posting journals I'd be highly surprised if Dave did a journal himself you know if he did I may want to look at that because you know and so on so we look at these and we pick out high risk journal criteria we you know we've identified a number and then tested those and got comfortable with that data or got comfortable with that they reflect the underlying financial transactions we're just finalising that so with some final requests that officers are helping us with so that's the significant risks there's a lot more in this report I'm going to just cycle ahead to a couple of the appendices and then I'll cover some of the other areas very quickly so over on page 333 as you uncorrupted audit difference now I mentioned earlier there'll be another one added to this if it checks over in terms of the schools issue about 1.9 million but on this one just a little bit of you know something being incorrectly coded we use statistical sampling that allows us you know it was a very small error less than a thousand pounds but you know it's very big population based now we use statistical sampling that allows us to it'll either say no there's going to be a material misstatement there it's going to say no you've got to do some extra work or be within the total testing you've done we're comfortable with that and as long as you report a potential misstatement 5.3 million in this case we're satisfied now your materiality level is 25 million so I'm comfortable that I can report that and I'm happy that the accounts are free from material misstatement page 334 some correcting misstatements which Matt has already taken you through which I'm not going to point to a small number of disclosure changes as well in the subsequent pages and then finally on 336 there's the prior adjustment which was talked to at the November audit committee and again Matt has mentioned that's why your accounts look slightly different with restatements on happy to take any questions on those later a couple of other important pages are the fees page on page 229 just to make it clear our fees scale fee I thought I'd raise this just because I'd probably get a question on it if not anyway but you know statutory audit fees set by PSA the reason for the increase is because it was a new procurement round ISA 315 was set out in PSA consultations not being included in the scale fee we've agreed that with officers and it's going through the process of PSA grievance confirming that's not unusual or untypical so there's extra check and balance we've had to do some additional work over prior year adjustments over some additional testing where we've had to extend samples where we have found issues something around the efficiency of some of those data issues means you're having to do more extra work and stuff and then considering the VFM significant risk there's an overrun of there of £43,000 which again I'd agree I'd also agree that with PSA as well so they'd be challenging me on how many hours have we actually spent doing that as well so there's an extra check and balance in that process about getting that approved as approved as well and finally the independent slides which starts on the next page page 330 we don't just check independence at the beginning at the end we're checking it we've got systems in place to make sure nobody else tries to do any work with Islington that would potentially be seen as a conflict of interest the three pieces of work that we do with Islington over and above this many years ago used to be done by the auditor when the audit commission was around you know the auditor would do typical kind of assurance work housing benefits the public health ring funding certification and teachers pension return the levels of those fees you know don't have a conflict on really have an impact on me in terms of kind of being potentially I'm worried about those fees so I'm not going to raise something as part of the audit in terms of status of the audit looks like those two outstanding areas being almost resolved subject to those getting resolved us then receiving signed statements of accounts and a letter of representation us checking those signed accounts the same numbers as we've audited we're in a position to issue a clean unqualified audit opinion ahead of the 28th of February backstop date happy to take any questions on that it's probably been a lot of me there so thank you very much indeed just help us when when do you think you'll be able to provide that clean statement ahead of the 28th like next week yeah sorry next week yeah excellent okay on essentially items B1 B2 questions observations nick a couple from me firstly on the significant value for money risk one of them flagged housing ombudsman special investigation my reading of the report was you were concerned but in short you are satisfied that steps are now being taken to mitigate that risk is that a fair summary of your conclusions on that I should apologize I was going to cover the BFM significant risk as part of the auditor's annual report later but so apologies for not but happy to answer that in a nutshell yeah so we spotted an issue as a regulator or as you would we flagged it as a risk we needed to undertake some more detailed work about understanding how that was being resolved once we had a really good engagement process with your housing directorate what was clearly evident is these things didn't just land on your doorstep in October 2023 you were aware of them you were in conversations and discussions with the regulator and importantly you were doing things about your arrangements you were updating policy documents you were updating procedures I could see things going through your governance processes that meant that actually when I step back and think about your arrangements during 2023 2024 because you began to make those arrangements before 2023 2024 and at the beginning of 2023 2024 I was confident your arrangements during the financial year were adequate now that doesn't mean there isn't weaknesses there but they didn't raise themselves to a significant level as defined by the audit code of practice so absolutely there's weaknesses there's unfortunate things that people have gone through as well that's cited in the special investigation report but actually do they reason during the financial year you were going through a process of making sure you're responding to them and I've seen evidence that fact including things around disrepair mould and issues like that and I could see tangible improvements in your arrangements and ultimately I'm there to look at arrangements and you were making improvements and arrangements so it's absolutely right it was a risk because it's a third party saying something over a key part of your business operations and so on but it's right we then did some work to say right is this a significant issue and we got we were comfortable that it wasn't a significant issue and then therefore haven't raised a recommendation we're also noting there that actually come April 24 the regulator had actually put you back to normal monitoring arrangements now that didn't happen overnight so indicative of the work you've done leading up to that because April 24 is technically outside the period but clearly you've been doing things with your arrangements that have satisfied the regulator as well good yeah and I think one of the misstatements was in relation to penalty charge notices I just want to be clear that these are effectively technical matters and they have no implication whatsoever for the general fund which as councillors we are naturally very focused on yeah absolutely they were just netting and grossing so what you showed before was income minus your bad debt provision what you should be saying is total income from all penalty charges and then a separate cost for your provision and bad debt and that's what these adjustments will do in this set of what have done in this set of accounts and hopefully will do going forward so no impact on the bottom line other members Alan you had a number of very helpful suggestions yes so there's a process we have between firms where we look at we actually go in and review working papers to get comfortable with their closing balances which are the opening balances that we look at and stuff so that process didn't throw out any specific risks and issues that were that we were worried about and needed to reflect in terms of our risk assessment but of course it's only when you then get into the detail of testing in year that you will come across issues potentially for yeah so 2425 is going to be the first year of the implementation of IFRS 16 in the SIFRA code it's it's going to change how you account for leases it's going to mean you need to know about your leases and one of the big risks is completeness finance not knowing about a lease in one of the services so there's going to be a lot of work in terms of planning and risk assessment for the 2425 audit about understanding what your arrangements are about establishing leases and then almost the easier bit about accounting for them so the real risk around that is completeness you're a big council with lots of different services are you familiar with all the sizeable leases and are you able to categorise and appropriately account for them and that's a challenge that Fect is facing this year absolutely good thank you and just wind back to earlier in the report where there's a presentation of the general fund balances reserves particularly earmarked reserves got a judgment about where we are presently with overall reserves and also the balance between earmarked reserves and ones which are free to spend balances in the general fund oh sorry I'm asking what's your judgment on the balances I'm satisfied that everything is fairly stated in terms of your financial statements we do make some comments in B4 around your reserves levels and kind of that so we reflect on those reserves levels I'm not concerned about those reserves levels you will know to make a comment about net budget gaps in future years which I think is important because you can only spend reserves once so it's about having those arrangements in place the comment we're making your track record shows that you deliver in terms against your financial performance but clearly there's new challenges every single year in terms of funding in terms of demand as well so we're happy that things are fairly stated we're happy that your level of reserves doesn't cause a significant weakness but it is something we clearly return to honour every single year and look at interest every single quarterly monitoring report good other questions comments from members of the committee good thank you very much indeed shall we just move on to item B3 which is pension fund accounts which all look pretty good but there are a couple of points of commentary I think what's your assessment do you want to introduce this first no I'm happy to hand up to Rash if that's easier yeah B4 begins on page 389 of the hard copies and 39 something of the PDFs sorry 355 on the PDF thank you chair so exactly the same as the previous item this is our audit highlights report in terms of the pension fund you know this report was the exact same thing about communicating to you those charged with governance the key issues that were required to under auditing standards and so on again in May we produced an audit plan and that set out our significant risks over on page 363 we copy of the schematic in terms of the risks and other areas of focus a lot of our work on a pension fund audit as you'd expect looks at the valuation of the different assets and you know there's a lot of talking in our report and your pension fund accounts around level 1 level 2 level 3 and that's just how you categorise the assets level 1 is something that's actually really easy to value because there's a quoted market for it like shares bond prices and so on level 2 slightly harder you're relying on yields and so on and level 3 can be more problematic so we carve our report in terms of those areas and then over on pages 368 to 370 we take level 3 level 2 and level 1 investments in reverse order almost so we look at the work around that we of course do different procedures for the different ones it's easier to audit a level 1 investment you just have to get a copy of the financial times or something you can tick that off as long as you've got the right numbers of stock and stuff for the others it requires more detailed work we need to take work on that there's a small number of issues resulting in corrected and corrected misstatements one which you'll be very familiar with because that's been an issue in the past and a small number of recommendations if I take you to those particular pages so page 380 deals with the uncorrected audit difference the first one of those very simpler you've got to produce the account 31st of May the valuation is available to you at the valuation is not available to you so you take the 1st December valuation and you adjust that for cash movements and there's a difference that's expected a lot of pension funds have that it's not material I'm not expecting you to amend it you're not going to amend it so that's fine I'm comfortable with that there's also been about classification issue over the second uncorrected item to do with property fund and termination so just around we have a recommendation around some of these misclassifications just around making sure sometimes how the custodian deals with the and treats changes in pension funds and investments is slightly different to the accounting rules so it's just being watchful over those particular areas small number of uncorrected disclosure misstatements mainly linked to those issues and then some corrective misstatements to do to do with some of the foreign collateral calls and so on again nothing that's uncommon but again just kind of mindful of how those classifications are considered when you get the information from the custodian and really our recommendations point to a number of those issues including one of the recommendations the first two recommendations over on page 383 are very similar to the council's report you know you've got the segregation of duties issue and then you've got the issue regarding the definition of related parties and just kind of tightening up that as per the code there as well so subject to again receipt of signed financial statements us checking those financial statements a signed letter representation will be in a position at the same time next week to issue a clean audit opinion you get two audit opinions you get one on the council one on the pension fund should be dated the same day so once the council's once we're comfortable with both we'll be in a position to issue clean audit opinions I think for both audits I think it's really important to point out we do a lot of work I have to say that but officers we wouldn't be able to get to this point if it wasn't with the support of officers officers have yeah one's always had officers have been really supportive and helpful they've taken our challenges in the right way a number of officers don't from past experience at other authorities it's been taken the right way we've been able to understand the way that officers have treated things in the past either got comfortable with that or not but it's really positive and builds on the back of this we don't just turn up next year and do another audit we have a debrief there will be inevitably things what we want officers to do differently things that officers want us to do differently and we'll have a sensible conversation and try and then get some incremental improvement so we can try and move this timeline off a little bit further for both audits and get comfortable sooner again happy to take on the pension fund anybody I think my understanding is that the corrected and uncorrected misstatements don't ultimately change the valuation of the fund it's just that some of the transactions have been described as investment income when in fact they are same of an asset and that's a very exotic distinction for most of us but end of the day there's no misvaluation of the assets it's just the way that the income has been described good okay members got any questions on that no okay well let's just then move on to we've already mentioned the annual reports which has got the VFM issues are there any other matters that we should be aware of of course yeah yeah besides sure thank you Raj so the auditor's annual report starting from page 395 as per the code of audit practice as the public facing commentary and it provides summary of the accounts audit findings which Raj has taken you through in details earlier and importantly it covers written commentary of council's arrangements to secure economy efficiency and effectiveness in the use of resources including if we have identified any significant weaknesses so quickly coming to the page 399 of the report executive summary on this page we are confirming that we have not had to make use of any of our statutory powers such as issuing any statutory recommendation or issuing a public interest report then important is on page 405 so this is it shows the outcome of our VFM risk assessment work on which Raj just touched this earlier briefly confirming that we have not identified any significant weaknesses in the VFM arrangements and then on page 407 basically so onwards highlights our commentary on the key lines of inquiry identified by the NAO's code and guidance and these are financial sustainability governance and improving economy efficiency and effectiveness I will take these as red but key points we make clearly like a number of other consoles you will face financial challenges we have identified on page 409 of the report where we are saying that the net budget gaps identified in your medium term financial strategy these are financial risks you face but we are satisfied today that the arrangements are in place to manage these gaps and we are happy with the current arrangements around the financial sustainability so overall we are satisfied with the council arrangements for securing economy efficiency and effectiveness and therefore we have not identified any significant weakness in these three areas of EFM and we did identify a risk on which is more detailed on page 415 and 416 dealing with this although I appreciate RASH earlier briefly on that but if RASH would like to share more details around it no the question earlier from council Wayne addressed that that's a repeat to what's in the IC260 report in terms of how we dealt with the risk I find it from that and confirming there's no significant weaknesses which I mentioned earlier so again when we issue our audit opinion we issue a final version of this report without the red with the date that we signed off the audit opinion this will you require to put on the council's website so it's available for members of the public to review and read our audit opinion also will confirm that there is no significant weaknesses identified in your use of resources as well again happy to take any questions on the detail of that I think members will certainly want to look at well have looked at the pages 408 to 409 on are we a going concern well yes we are but there are well identified gaps and aware of them and we've got a track record of action to fill those gaps and then in 409 our earmark reserves and the general fund balance are pretty healthy healthier I think than we might have thought 12 months ago where we were starting to see visuals presented to us which could bar graph that goes down down down down down in fact that isn't what's happened so that's very helpful to see it in those terms members got any other members got any questions comments on this point no ok good thank you very much indeed and then just the final thing is we will approve the draft letters sorry let's go through the whole decision taking process so on item B1 we have we've got 1.1 to 1.3 to approve the statement of accounts delegate authority to section 151 officer and the chair of audit to sign and approve the audit statement of accounts and then to approve the annual governance statement signed by the leader and chief executive we're happy with that thank you and then on B2 we are noting the audit findings B3 also noting the audit findings on the pension fund and then B4 we're noting the annual audit report particularly the FN elements and then item B5 we are approving the draft letters of management representation for the council and the pension fund Matt just to be clear that the accounts may have small tweaks and the letter of rep subject to any final comments from the auditors and the final statement on the letter of rep so just to approve the final consultation with yourself and Dave don't worry that's what recommendation 1.21 B1 says so that's what it means okay we're all happy to note and approve as I've well thank you very much indeed for your attendance this evening for a session taking about an hour to do this which is sound scrutiny I think I'm very pleased with the progress with our audits and looking forward to having you here again a year from now where we hope the story is going to be just as possible well we'll see you in between now and then obviously yeah yeah yeah hard to keep you away good thank you very much indeed guys you're free to head out into a very chilly night or happy to stay if you want right yeah we're going to talk about internal audit and then a couple of other things fine super we like auditors that are keen okay let's move on to item B6 then which is the proposal to demerge the internal audit shared service with Camden so we have a paper which is being prepared thank you very much indeed for that it's paralleled with an to Camden's audit committee on Thursday of this week and I've circulated to members also an additional set of observations from Nazreen Khan the internal auditor expressing her views about the proposal which are also very helpful not going to publish those but suffice to say that she gives a very positive recommendation too however I think there are a number of things that committee will want to quiz you on so Paul take us through it thank you chair I will keep it brief happy to go into any more detail questions so the recommendations speak for themselves the shared service has been it was kind of instigated way back in 2010 and I think over the 15 years just the landscape of local government is incredibly different now there's a series of anticipated benefits when we pulled together the shared service going back to that point in time and a fairly honest assessment of where we fit today versus those anticipated benefits which service has delivered an awful lot of good service to both organisations over the period but the reality is having a shared head of internal audit means that we have affected half the full time equivalent doing a really really important role for the organisation other things around shared contracts and the teams working across both organisations in reality don't happen so the proposal to I don't know whether I'm interfering with the microphone clicking noises so the proposal talks about the opportunities of demerging essentially being able to focus more on the increased risk profile that local authority organisations experience now whilst also retaining the fact that the services will work very closely across London the network is really close but particularly because the service has been a shared service the benefits that we get through collaboration will be able to continue it's just the two shared elements being the head of internal audit post and the risk manager post being sovereign will give us that extra focus and that extra ability for them to be in the room for important conversations and for them to have more capacity to be able to deal with proposals such as advising on the replacement of our financial systems etc those are just very specific examples that we will get as a benefit of this change the timeline is proposed to be from 1st of July and there's a little bit around how we will recruit the role but ultimately the ultimately do you feel like Islington is an attractive place to work so I don't anticipate any difficulties recruiting but you know you never know in the current world because it is a competitive environment and particularly audit resources are quite scarce which I'm sure Rash will attest to so there are risks within that however we do work very collaboratively I work very collaboratively with my peer in Camden and if there was to be any kind of mitigations or backup plan for this then I'm sure we could look at that if we were struggling to recruit which we may know by then but I do not anticipate that to be a problem it's just covering law bases with risk really around that okay thank you very much indeed Paul I think members have got a number of questions I think it's fair to say that we we recognise that this is one of legacy shared services which arose from a very bold very ambitious plan in 2010 when we anticipated we kind of anticipated the worst in local government finances and saw this as a way now that came unwound really quite rapidly and even those boroughs that went for example the tri-borough arrangement discovered that no matter how committed they were to it it wasn't working out so public health remained one internal audit albeit only two positions we've already demerged public health there's a rationale to demerging these but there may be some very significant operational risks and get from where we are now to where we'd like to be three four five six months from now so I think the first thing we probably need to just really press you on is what are the risks with so all the risk falls on us to now recruit to these two posts no risk falls on Camden because they already employ those two folks so what's the methodology for ensuring that we can satisfactorily fill these posts and what's the interim arrangements potentially if we don't so firstly I'll say that the post the report to NASRI and apart from the head of audit investigations and the head of sorry the audit manager investigations and the audit manager for internal audit are both sovereign employees who will continue to run the internal audit service and the investigation service so in the absence of a head of internal audit post those posts would report directly to me and I would oversee their work that isn't the intended plan but that is an acceptable mitigation in the short term whilst should there be any gaps the recruitment process that we need to go through we are working up now I believe that the salary that we would be offering is competitive there have been recent posts advertised and recruited to successfully on slightly on similar grades slightly lower slightly higher the ones that have struggled to recruit particularly for the head of internal audit post have been the ones that have been graded towards the bottom of a head of service grade because it is a really important skilled and scarce role to recruit to so I don't envisage any difficulties going out with an advert at the salary that we would with the reputation that Islington has with the reputation for the service as well that doesn't mean that there isn't a risk that no one applies or that unsuitable candidates apply but that I feel then refers to the mitigation that I talked about before around it is a mutual decision to look for the demerging of the service the timeline was designed to give us enough time to go out to recruit and have some sure that we had a resource either starting by then or going through their notice period so there wasn't a noticeable gap if it was looking highly unlikely there would be I believe an open conversation to say can we extend the existing arrangements around the shared service I hope and don't expect to have to do that but that is a potential option around mitigating a gap in the post and is there any risk that this is a post which has to be held in abeyance briefly as a result of the current management exercise to scrutinise every vacant post as it arises I would say it's an absolute critical role it is essential for us to have someone functioning as a chief audit executive so my view is that the role will not be held other members with questions and comments a general one really by implication of the merger the current internal audit plan no doubt will take a knock on that until new individuals get in situ so any thoughts on that so the audit manager is sorry I will start again so we have recruited a new audit manager and until that person starts we have an acting arrangement around the audit manager post they fulfil the audit plan with oversight from the head of internal audit post so that work will continue however I do recognise that any change is disruptive so seeking to mitigate that at all corners will be the priority the other thing that I will say is that we have had a significant focus on follow ups and reducing those and there is sufficient contingency within the audit plan for there to be some disruption and also some re-phasing and my hope then is that the extra support that we get from a sovereign person in that role will help catch up I don't know I don't feel like I'm touching I think you've got a radioactive cufflink or something like that it could be this something like that sorry I thought it was me but I couldn't work out what I was doing just as tag not working properly thank you thank you very much indeed other members questions Janet thank you it's going to cost us quite a lot extra isn't it is it the same cost for Camden so it it is significant cost because there are senior roles I would absolutely be of the view that it is value for money and the benefits return to the organisation of having stronger internal controls having a stronger focus on fraud prevention and fraud detection etc will generate benefits way in excess of the cost the problem is they are not always directly cashable how do we cash a preventive fraud etc but it does enable us to strengthen our focus on those things and saving the organisation £100,000 to pay for it I believe absolutely will do that and I will also be we are we're taking a closer look as an investigation service around how do we evidence the returns to the organisation that additional investment in that team makes Jan's asked a very important question because a lot of the savings that arise from having good internal audit work don't actually materialise as savings they usually materialise themselves as poor service standards if they're not uncovered it's like lots of things we say we're bound to be saving money if we do this and this actually we don't save money we just do something better eventually maybe income comes in but at the very best there's always a bit of a time like so I think the question is if this is going to cost another 100,000 or more what are you going to veer within the departmental budget to fill that gap I should one question we also spend on another staffing resource which is bought in PWC operatives is that potentially where a wee bit of saving is made so initially the £100,000 will be found from being the first call on they can post within the directories what I would like to do with the service with the help of the new incumbent would be to then look at the whole model of the service around the use of the PWC contract for some internal audits my view is that we should only commission them for specialists and I think there's probably a bit of scope creep around the work that they do towards more generalised internal audits the other thing that I would want to see within the service as well is a bit more succession planning than building our own supply of auditors for the future so the post generally across the whole shared service are quite at the senior level and I'd want to see a bit of a mix and some training opportunities within there as well which would be reflected in the cost base overall in the longer term yeah a couple of things from me you've said that it's a mutual decision that would suggest that we corporately think that this is a good idea or else it would not be a mutual decision to the best of my recollection I think I've been on audit committee for about six years there's certainly not been any suggestion that the current arrangements aren't working have there been any reports made to this committee that the current arrangements aren't working as well as you would have liked them to be and just putting the question of any report into this committee to one side why do you think that we need effectively if I understand the proposal two senior management roles when at the moment it's covered by effectively a 0.5 chief audit exec a 0.5 risk manager so I will phrase it in a way that I don't have any concerns about the existing service what I would suggest is that this would strengthen and improve which wouldn't be possible without increasing that capacity at the head of internal audit level the point around the risk manager as well so the risk manager doing that across two organisations can only ever be a kind of consolidation point and not adding the value that someone at the grade of the role would want to the other thing that I would say in response is around the impact on employee wellbeing around the risk that ahead of internal audit across two major inner London boroughs with all of the projects schemes ideas politics everything else that goes on in a London borough is a lot to ask and a lot to do in half a full time post so it isn't necessarily about any failures from the existing service it is about taking what works really well from that and bolstering it so that it is able to give adequate assurance because that's the thing that it's trying to do it's trying to say things are okay and it can only say things are okay to things it sees and if it can't see enough on a day-to-day basis to be able to comment then it's the absence of finding the problem as opposed to it being the problem in itself back on that in order for us to set up a balanced budget the 25-26 budget involves frankly a headcount reduction and one can readily envisage every single directorate saying we want to do more we want to have fully recruit we want more staff so we can perform better a slightly different a slightly difficult argument for the resources team to make that we're looking for effectively an expansion in what we are doing in this field when inevitably we will be asking for headcount reductions in other directorates so I'm just a little bit concerned about the optics I don't dispute more capacity the team can do a better job but we're not we don't have unlimited resources and it's a question of whether it is value for money and the second question is if we as a committee have real doubts about this could it be stopped so just on the money first so the point that it is being funded from other vacancies it is not being it is not growth in net cost or numbers overall and the resources department will have to contribute towards the wider workforce efficiency savings so effectively it has to find more in order to fund this proposal the proposal has been discussed with corporate directors and CMC overall in the context of the fact that we know we have to find workforce reductions and there is no concerns in fact the organisation from an officer point of view is supportive of the proposals in terms of could you stop it clearly you are part of the governance apparatus of the organisation you're responsible for the internal audit charter it would not be an appropriate thing to dismiss any concerns that you had around the proposal going forward so that is the purpose of bringing the paper here for a discussion to seek your views I think Nick is saying can we stop the 113 agreement being no we can't because Camden can give us notice so it will happen whether we agree to it or not we don't have a Russia style veto at the Security Council on this the thing which I think members are also very conscious of because Nick is right we are making quite significant commitment in the upcoming budget to headcount reduction 10% across the whole organisation we are suddenly become very aware of the fact the number of CO graded posts in the Council has almost doubled in five years and Nick's committee is looking a little bit more closely about the efficacy of that really quite top heavy organisation this is adding a new CO graded post to our list we'll go from 81 to 82 doesn't look good that David I totally recognise the things that are being said and the optics of it and the other issues and the context and so on what I would say is that we are operating in a heightened risk environment we are experiencing budget stress there are lots of things that can happen and we've got to be really mindful of that and if you look at some of the information that's out there whether it's individual public interest reports pertaining to some of the councils who've had real difficulties managing their risk or whether it's some of the things that have summarised some of that information and brought together overall lessons learned or overall patterns in this sector and other bits of the public sector what you'll find is one of the very key themes and there's not that many key things but the key patterns are a lack of capacity in finance a lack of capacity in audit and things like that and what councils have done when they're trying to save money is make significant cuts to those things because they are facing financial challenges and often the lessons learned from that has been that they've actually done completely the wrong thing and that's exactly not the place to make cuts or focus savings when financial challenges get bigger and that is very very clear there is a raft of evidence out there that points to that and I think that's really the place we're coming from that resources the directorate is certainly not insulated from the staffing saving or any other need to find efficiencies and we will most certainly do that and we will contribute our fair share or more to the overall savings target I feel certain of that and plans are well underway but I think in this particular case for this particular post I think it is very much needed and I'm extremely keen that it should go ahead as it is okay thank you listen don't worry I don't think numbers feel that we don't need this yeah we do need this capacity I think the question we're partly asking here is whether you create that capacity with senior roles or alternatively you build the sort of middle ranks of the organisation having said that this will be a tier 4 and a tier 5 post the tier 4 will be a chief officer grade which is starting to stretch the definition of the chief officer to be perfectly honest and then the tier 7 post will be a fifth tier post there's an alternative argument which says maybe we should be strengthening the principal auditors the principal investigators rather than bringing in more senior management effectively doubling the senior management capacity that we've got by with or perhaps thrived on until recently until now yeah I think I sort of understand the line of questioning but I think if we're going to get the right person for this with the right level of experience who can build relationships across the council or both roles that can take a strategic view of risk thinking longer term thinking short medium and longer term thinking about some of the challenges we face and how we would link that to the corporate plan and take that sort of that view but also link it to the audit plan draw through the lessons learned and report to this committee in a way I think we need to do and really move it the whole operation to the next level I think we will need a post of that seniority would be my view yeah I'll just conclude by saying I think the message here David is that we are hiring people right across the organisation where we are elevating these networking relationship building strategic thinking roles what we're lacking is people actually do stuff right who investigate rather than strategise about how we will investigate or relationship building with other bits of the council I mean we may be a bit starry eyed as elected members but we just basically think the organisation ought to be working in a fairly effective kind of way without people having to build all of this kind of relationship and networking infrastructure which you know to put it crudely is a lot of people you know tiers 3 4 and 5 just spending a lot of time in meetings rather than you know doing what internal auditors really ought to be doing which is number crunching getting down in the weeds checking this verifying that you know that's what internal audit ought to be you know and then I'll come to Caroline thank you so whilst we describe in those kind of starry eyed terms I mean the reality is that the work that the current incumbent does is incredibly detailed incredibly diligent and effectful so nothing goes out from the service without it being part of that quality assurance more I made the point in the report that actually another alternative would be to just increase the numbers of staff within the teams but still perhaps work to Nasreen as a 0.5 FTE and the problem with that is that that role is already functioning as a bottleneck creating more people doing stuff and not increasing the size of the bottom it means that the impact on the organisation is still constrained through that resource actually more of the head of internal audit resource which is what I feel we need gives that ability to kind of amplify the impact of the stuff that are already here but then also that presence on that impact on the organisation more widely so going into departments having conversations not just building relationships but taking a view on how much assurance they are giving and can have so it is whilst it's a chief officer grade it is not strategising it is absolutely kind of impactful detailed work we're living in really difficult financial times particularly for local authorities and we're also facing you know kind of the bigger wider world events are looking really worrying and complex at the moment so my all my instincts say we should be listening to what the officers are saying and the case that they're making because the one place where we don't want unaddressed risk is through this whole area of audit and finance so I just I kind of hear the queries that Paul and Nick have been raising and I hear those loud and clear but I also think that we're going forward into world events could actually see ourselves with more energy crises the external chaos that is outside of what's going on within this borough could actually start to have really big impacts and actually having bolstering our ability to manage risk seems like something worth doing but that's just one voice speaking up for the status quo there against us difficult characters you're absolutely right there's a whole load of risks out there that we don't know about and there's a whole load of risks which are practically materially probably having impacts right now and we need to find them and minimize mitigate and in some cases prosecute if there's actual wrongdoing the question is in the context effectively of Camden I'll put it in very crude terms Camden saying let's mutually demerge but if it's not mutual it's going to be unilateral what do we do instead and if it's just simply to replicate the current model but just full time the couple of shared posts it seems like a call sort of reaction to that challenge that we're going to be going it alone a few months from now I think it's a message we're not here 30 years since committees of councillors gave the approval of management restructures and all that kind of stuff we don't want to micromanage you but I think this is very much the bread and butter of this committee we want to ask how are we responding to the wide range of new risks which the council faces do we have the people in place and the systems do the analytical tools and the capability to be able to spot those risks and if they're materialising themselves how do we mitigate against them that's what we're asking so for example when the audit charter comes back to us I think we will be asking those questions except that you will have already decided what the staffing structure is going to be for the team but what can I describe that's exactly what we're into it just seems like the easy answer to just full time eyes these two previously shared posts so I think the first step is definitely to recruit to the head of the internal audit post because that is the capacity that has the vision the knowledge and the role to then shake what the service within their remit looks like I would not describe this as just a kind of mechanistic we'll just replace like with like I see this as being the start of then a kind of transformation for the service which would be which will cover the things that I talked about before around succession planning but also look at the use of technology in auditing you know there's lots of there's lots of organisations out there that are doing real time auditing on so much of their work etc to then enable more added value of thinking through how do we actually manage risks but none of that matters if then you don't have the interface into the departments to actually manage those risks make decisions influence decisions etc so that is that's ultimately the key point around why the capacity in this post is needed and why you know overall this committee is is you know part of that assurance mechanism I suppose what I'm saying with this report is here is a way for you to get more assurance and it will not cost you anything else because we will be making the savings required to fund this within our existing resources so not coming with a financial ask all I'm coming with is a proposal that you can get more assurance okay are the members got any final thoughts on this you know we could wrestle this with for hours I mean all right let's add I think I think the conclusion here is I mean the recommendations of the contents of the report and frankly to note that the shared service will end on the 1st of July 2025 assuming that Camden take a decision along those lines on Thursday and you know the tea leaves being read in Camden suggest that they will and to note that the shared service has you know has been beneficial to both boroughs over the 15 sorry 13 years it's been a very positive impact in this borough and presumably also in Camden and we will so we're noting also that we will be revising the internal audit charter I think additionally we're noting that you know this is management action that management can and will do and but I think from us you know here this strong message that there is real concern within the authority particularly in relation to CO graded posts we've gone to a situation where five years ago we had one chief officer for every 105 front lines other staff now we've got one chief officer graded post for every 59 other staff and that's during a period in which the council's workforce has actually grown a little bit so this top heavy which I think Nick's committee is going to be looking more closely into this notion that we need to be employing more people at more senior levels to do things which might result in improved services which are actually not necessarily investing in the front line workforce on the immediate levels above that at a time when there's a growing perception the council is not delivering to the full extent or meeting some of the challenges today that it might have done in the past that's a really powerful message that we want corporate directors and other managers to really understand members are very concerned about the organisation becoming very top heavy and its impact on service delivery. Okay well our members happy then? Oh please go on. I think I am a little bit concerned about the tightness of the timetable to get the service up and running. I was heartened by what Paul said about the possibility of an extension if we don't recruit because what we don't want to be is recruiting somebody who isn't right for the job because we feel that we've got a deadline and that we won't have an effective internal audit service and whilst that's no reflection whatsoever on Paul's competence Paul's got a job to be doing and it's a little bit uncomfortable the idea of Paul line managing the internal audit process for a prolonged period of time. So I think what I would add to Council Convery's observations is, this is I think between the lines, the impetus comes from Camden rather than us, they are retaining Nazarene and the principal risk manager quite rightly, they have first call on them but actually the quid pro quo might be if we can't recruit that it is put back maybe for three months so that we have in the spirit of cooperation with our fellow local, London local authority, a functioning audit service, internal audit service. Thank you Nick, that's really well put indeed. Okay, we'll record those in the minutes as a caveat that we'd like a little bit of wiggle room if things don't work out quite as we expect and if absolutely necessary you know we might even have a word with some of our friends in Camden and say you know it kind of looks like you're cutting us adrift. You know we're going to sink, we're not going to sink, we're going to swim but we might need a lifeline on timeline during the summer. Okay, you happy with that? Alright, so noted and agreed. Right then let's just look at the forward plan. The forward plan actually has got nothing looking forward in it because we've slightly failed to consider topics, well obviously there's things coming to committees which are scheduled but in the forward plan what the what our sort of small scale deep dive scrutiny topics might be. Colleagues got views? Before I suggest something? Well we've had a little bit of to and fro on what might be some topics. I think there's a bit of yeah I think there's a bit of agreement that there's things on the risk register which are sort of you know flashing amber lights at the moment. So a closer and more forensic look at these the forward school roles data. Conscious that children's services have got this on their radar obviously they're just starting to implement phase three but a good hard look at what the demographic data is showing us what are the drivers of falling people roles what the latest numbers are telling us. Don't want to double up on what children's services are doing and kind of spotting this school versus that school and so on but just really get a grip and in particular to look again hard at what some of the population projections from three or four years ago how they've actually panned out they might actually be worse hard hard to say. So that's one I think the other proposition might be to sorry in the risk register we've in the past noted the continuing problems of recycle rates and progress towards net zero and I think those might be worthwhile topics and then finally develop that thought while I say there is a small thing that we're a little bit concerned about which is a essentially a sort of a governance issue which is this question about councillor involvement in senior staff appointments and whether there is actually an indemnification or insurance framework in place because it sort of got raised by one issue and then just tangentially Nick quite rightly said wait a minute this this is a bit of a question about all member involvement in all appointments appeals and in a small number of cases potentially dismissals as well so I think what we really welcome Farida is from legal a really hard look at what the law says well I think we know the law says it starts with the 1875 Act and it goes through to the 2004 regulations but then a careful look at what have we got in place by way of an indemnification and or insurance cover for those potential civil liability claims claims that might arise from disputed appointments appeals and dismissals yeah yeah agree with that what were you going to say about complaints sorry okay go on Janet on the schools issue is there any way of tying into this the risk that if a school which has a budget has to close that it will come to that risk will come to the council could that be included in this well yes and no I think I think what we're looking at is is better illustrating what the extent of the current risk is the particular problem of schools that have to close or forced to close for some reason that are running deficits I think we're fairly clear what what happens then aren't we David I think I've got to apologise I think last time I made various statements about this and you challenged my statements and I agree and then I quoted myself and I said I'd go off and find out and I know we did Paul and I did have a discussion about it afterwards and I'm afraid I think we didn't come to either a clear conclusion nor did we properly communicate it back to you so I'm sorry we'll have to go and take that away but I think what I said was that if a school that a maintained school is in deficit and it becomes an academy they effectively don't they don't take the deficit with them and we the DSG the council in other words ends up standing that deficit which was a wholly unsatisfactory thing I think that was broadly correct but there is a slight nuance to it Paul can you remember well I tell you what rather than rehearsing it now and trying to remember what what what you might have known and didn't know what just just just produce a short note so this is not a deep dive but it's just let's just just clarify that because a there is the risk of schools being closed as a result of falling roles being more severe having to be closed but doing so with the deficit and those schools which might leave the local authority and go to academy where they're running a deficit as well yeah so just the confirmation note of that would be really helpful I think yeah Caroline I just wanted to check when you were talking about the environment and community wealth building questions was the parking income included in that because I do think that would be interesting to look at into I don't include that and some to be honest yes I do think that is a bit of an issue but I feel like it's I've been a bit mono obsessed about this myself so I'm kind of keeping quiet for now I think it would be quite wise probably to have yet another illustration of what a year on the parking revenue account looks like whether it's on or off well it's slightly off budget apparently you know it will be the third year that there's something a bit wrong with the income estimates and some over optimistic assumptions about other income I think plus some costs that have gone slightly adrift so I think I think it'd be helpful to have a refresh of the parking income reports as well thank you for that okay and Farina were you going to give us a bit of advice on something do you know I hadn't realized you're sitting over there until because it completely behind the screen I was thinking where is Farina did you have something to say yes it's just about the point about the deficit there is some guidance from DFE about how the deficit should be treated so I've got it here so I could just read it out no no what I think would be helpful is just let's just get a bit let's just get a bit of paper you know it's one side of a piece of paper yeah tell us what the legals is what finance think yeah I'm just just putting that in as an information note probably to the next next meeting okay so that'll be like a wee information note and we've got at least three topics there which will be deep dive topics agreed good is there any other business no well then that's fine thank you very much indeed everybody for your attendance this evening and our next meeting is soon-ish don't know when it's in our diaries anybody know when it is next meeting it's page six hundred and something march the good it's really soon isn't that great okay thanks everybody thank you thank you everybody