Transcript

Brilliant. Good evening everyone and welcome to tonight's extraordinary audit committee meeting. The meeting is being webcast, so we're live on webcast now. I'm councillor for Island Gardens and I am chair of the audit committee. I'm going to ask everyone to introduce themselves. I'm going to go counterclockwise around the room and then go to members online as well. Practic services officer supporting the audit committee. Hi, I'm councillor Mina Ali from Boise and I have no conflict. Good evening. Abdurraza Qasim, Director of Finance. Hassan Khan, Corporate Head of Financial and Technical Accounting. David Dobbs, Head of Audit. Jill Bailey from Legal. Brilliant. Thank you. And Fahana, do we have any apologies received, please? Oh, Fahana, thank you. Apologies, Mark. Do you want to introduce yourself? No problem. Thank you. I'm councillor Mark Francis from Boise Ward. Really sorry, Chair, that I'm not able to attend the committee in person this evening. Thank you. Thank you. Thank you. I'm grateful you can join us online. I'm councillor Francis. Fahana, have we had any apologies received, please? Chair, we've got apologies from councillor Bodwin Ali substituting for councillor Begum. Great. Thank you. And a special thanks to councillor Ali and councillor Khan for filling in this evening as well. I appreciate that this is an extraordinary meeting and I know we've had a number of deadlines to meet. It's been a little bit frustrating, I think, to have the papers come out at different times and in different supplements. It makes it quite difficult to prepare for quite a long meeting and I appreciate that there are valid reasons for that. But I would hope that sort of going forward we can try our best to try and give us as much time as possible to read the papers in advance. That would be very helpful. Before we go on to the substantial items, I just want to update the committee and also officers who are here tonight to let you know that committee members met informally in January to think about how we as committee members can work together to make sure that the committee is working as best as it can. As part of that, we had a really good discussion. We were joined by our independent co-opted member as well, Charlotte, and had a really good discussion about the terms of reference and also how we feel that we are performing against that terms of reference as well. Out of that discussion, we have agreed to have an extraordinary committee meeting, not this one but another one, really to kind of delve more into the detail of audit recommendations, audit reports and also risk management as well. Some things have shifted a little bit since we had that discussion which was around the middle of January. So, we will come on as part of the item on internal audit recommendations as part of that. Is that okay? I will then move on in that case to item 2.1, which is the EY External Audit Report for Council Accounts here on 31st March 2024. I'm going to issue a disclaimer of opinion on the financial statements. And given that that area was debated and discussed at the last meeting of the audit committee, what I thought we would do is, Drund, Hayley and I are very happy to take any questions. Thank you. Any questions for the auditors, please? You've interlocked that within your reporting as well. Councillor, sorry. Shall we pause there and let auditors respond and then we can come back? Okay. Will I kick off? Thank you for those, Councillor. So, in relation to the disclaimer, in that respect. Thank you. Can I just ask a follow-up on that, please, Steve? So, I guess Councillor Ahmed's question was around the BVI report and the assurance that it's given over the financial controls. Given that we have had that assurance from an external agency, why has the outcome of the BVI report featured so heavily in... As opposed to necessarily just the internal control environment as a whole. So, in undertaking our value-for-money work, we absolutely have taken into account the findings of the governance criteria, which is what we're focused on for that weakness. That's really helpful. Thank you. Any other... Councillor Ahmed, can I come back to you? Yeah, please. No, after you, but thank you. Yeah, so, I mean, the crux of it I want to get to is... So, in relation to your first point on the narrative in the report, it's absolutely focused on the statutory accounts financial reporting angle and actually Julie did raise this point and I think we did include a comment within the report to clarify that. But absolutely, we can go away and have a look at that and just make sure the wording's tightened up on that to prevent any confusion. In terms of handover between Deloitte's and ourselves, it was slightly delayed. So, there are... Whenever we are onboarding a new client, there are a number of independence returns and procedures that we need to work through. Until we've got all of that information from the council and that involves returns from every single councillor present at the council, we're unable to then undertake the rest of our onboarding procedures. So, we cannot start anyone to be clear of that process to then actually be able to start our audit work. So, it probably was slightly delayed from what would have been a desirable position earlier in the year. But I think we also need to remember that because of the backlog audits, Deloitte were still undertaking work at the same time and some of our reports... ...with us. I think we're all a resource to do it. Thank you. Thank you, Julie. I'm going to go to Charlotte next. And is there anyone else who wants to ask questions? Because I'm conscious of time. We've got quite a lot on the agenda and I want to keep us moving as well. So, Charlotte, please. Thanks, Chair. The difficulties that we experienced here, I guess, are not isolated. So, it's quite common when we're onboarding local authorities that this process takes quite a while to work through. If I'm honest, my memory doesn't serve me particularly well how long it actually took us from start to finish. But in some instances, what's been in them before they go and having a single point of contact. But I'm happy to go away and see if there was anything further underlying. No, no, not... No, I was just wondering what observations in this case it sounds like there weren't. Okay, thank you. Thank you. Before I come back to you, Councillor Ahmed, I've got a couple of questions of my own. So, Julie, Abdul-Razak and Hassan, we've got a number of recommendations in this report. Some of these are recommendations that we saw previously with the previous auditor, and some of these are new. How are we as a committee going to be assured about progress against those recommendations? In regards to control observations that Deloitte's would have made in previous audits and EY are going to do moving forward. So, our intention is to create a tracker and present it to the committee in a timely basis. I think the last time we reported on recommendation or control observation when it comes to recommendation, and the ones that are carrying forward are the legacy ones that we still need to address. And EY clearly have picked up on a couple of these, helpfully, so the plan is to progress and report to the audit committee in a timely manner on progress against our recommendations. Just to pick up on a couple of points that Julie raised in regards to the control observation, so valuations and how we challenge our valuers. I think there was an issue around the fundamental assumptions that the two sets of valuers use. So, this would be EY's real estate team as well as our valuers who we commission, who are currently commissioned, I should say, WHE. So, moving forward, I think for 24, 25, we are trying to address these fundamental assumptions in addressing those assumptions to bring them back in line or more closely in line with EY's real estate team. I think the longer-term plan is to move and explore commissioning potential services up front before the valuations come in and providing more challenge and scrutiny around that. I think we'll pick up on the income receipting point, I think, that Julie raised as well in terms of the control observation. So, one of the things, one of the aspects that EY struggled with in terms of the sampling, testing and evidencing transactions that come through our all-pay system, our AIM system. So, we could evidence batch amounts for the day coming into our bank statements, but the granular level of testing that EY do is individual transactions need to be seen in the bank statement. So, where they were sampling items on our income and expenditure statement, we weren't individually able to show them those amounts in the bank statement. So, we are commissioning additional reports to be run with our third-party vendor in relation to those. Thanks, Hassan, and thanks, Julie. Just to add, Councillor Mufida, there's a couple of things we need to work on now, I think, in terms of the audit preparedness. So, the first thing is, this was a difficult first-year audit, and normally things take a bit longer in terms of the walkthroughs. But we've looked at our resources, we're waiting for the new audit plan to come through hopefully soon. But I think the key thing for us now is to focus on training. So, some of these issues could be just staff training, because we had an influx of changes in terms of staff. So, things like running reports from systems, for example. And then the other bits is about, you know, making sure we start the audit earlier. So, normally we do interim audits. So, this time we've got plans to start in March for the 24-25, have the right resources in place to do some of the heavy sampling, for example, or building those assurances as early as possible. And then come the summer, then, you know, we work with our auditors again to just make sure we're on time in terms of delivering what they've requested. But I think we are on a journey. Normally, with new audits, there's a learning phase as we transition. And I think we've kind of worked with our auditors and built those relationships. Thank you. I think that tracker that you referred to would be really helpful. Do you think we can expect that from our April meeting? Or, yeah? We will aim to get that to you for the next ordinary meeting. Great. Look to include the statutory recommendations for the 13th of March. Will that give you enough time, though? Because it's 30 days, isn't it, that you need to respond to? Yeah, I think it will be three reports against each of the statutory recommendations for the 13th. I think it's four now, isn't it? I think. No, three. Three. Oh, OK. Sorry, I'm for issues of non-compliance. Apologies. Thank you. So, Councillor Ahmed, we've got two more minutes on this section. I don't want to curtail you. So, if you could keep your questions quite succinct and maybe we could follow up by email if we need. Thank you. So, page 49. Just want to pick up on the fees. There's two sets of fees there. Great. Thank you, everybody, for your contributions. Could I ask that the comments of the committee are noted, please? And thank you, Steve and Hayley, for your presentation. We'll then move on to 2.2, also from EYA, but on the pension fund accounts. And Hassan, I believe you're presenting this. I am Chair, so I'll take you through our audit results report for the pension fund. Firstly, just to set out the context, we have completed a significant pause there and happy to take any questions which members may have. Thank you for your presentation. Any questions for Hassan? I have a question. So, this is probably going to be directed towards officers around the membership data and sort of noted in the report that you're working to get that resolved by the end of March. How are you on track to meet that target date? If I may take this one. So, we've done three different work streams. So, the first one was data audit, which came back at 94%, which is quite good, actually. And the final piece now is to do the actual data corrections, which we've started. So, we will be reporting end of March in terms of that position. There's a lot of data we'll be reporting in the next couple of weeks. Thank you. And then a question, I suppose, for Hassan, really. So, looking at your timetable for issuing an unmodified audit opinion, you're looking at 26, 27. Given that this is, you know, this is a smaller area of focus, just the pensions, compared to the broader financial statements that Steve and Haley cover as part of their oversight, why are we not looking at getting back to that unmodified audit opinion earlier? What is it that's preventing that? It's the Senate Lords to still apply. We still get to that position. So, just so I'm clear, then. Excuse me. Even if it's part of your audit work for 24, 25, everything is absolutely perfect and you make no recommendations, it will still be disclaimed. You'll still be giving a disclaimed audit opinion. We're in those. That issue may well go away. Great, thank you. Any other questions? No. In that case, thank you, Hassan, for your presentation and could I ask that the comments of the committee are noted, please? So, thank you, Steve, Haley and Hassan. You're very welcome to stay for the remainder of the meeting. But equally, if you need to go, completely understand. I will then move on to 3.1, excuse me, which is a statement of accounts 2023 to 24 and that is for Abdel Razak Kassim and Hassan Khan to introduce. Thank you. Thank you, Chair. So, I'll take the report as read. This report presents the expected final updates to the statement of accounts for 2023-24 post-work and consideration undertaken by our external auditors, EY, for final approval in advance of the legislative backstop date of the 28th of February 2025. It also presents the legislative representations for the Council and Pension Fund accounts in Appendix B and C for approval. Sorry, I should have said earlier that the accounts are in Appendix A themselves. It presents the updated annual governance statement for noting and particularly updates to the annual governance statement relate to the outcome of prior year audits, the best value inspection and recommendations made by our external auditors, EY. The only other thing I'll mention in terms of the report itself is it does explain reasons for any adjustments not being actioned as part of the 23-24 accounts, which have been picked up by our external auditors, EY, and detailed within their audit findings report, largely due to the transactions all being immaterial, either individually or collectively, which we've discussed with EY, and planned actions to address these issues in the 24-25 accounts. Thank you, Chair. Thank you, Hassan. Any questions, please, committee members? Councillor Armid. I haven't got a question per se, but I've got a slight amendment to the first... It's a slight tweak on that first paragraph. I think it's better to read this. First paragraph in the financial statements? Page 43 of the annual governance statement. Oh, in the annual governance statement. Excuse me. So I just want to be clear, because we've had another supplement with the annual governance statement as well. So is that the version we're looking at? I'm looking at... Which is supplement three. It's all over the... Yes. No, I... I empathise. Do you want me to read it out, or do you want me to hand it to you? Well, it's not my governance statement, so I think it might be helpful for you to... You're the same. Yeah, but for you to suggest what you want to see changed. Yeah, so it's a slight tweak on there, so I'll just read it out. Thank you. So are you proposing that as something that's changed, or is that something that you know is going to be amended? I'm proposing it. You're proposing that. So I think we need to find a way of us as a committee taking our recommendations on the annual governance statement and presenting those back to management. So ultimately, I guess this is an annual governance statement that is signed by the chief executive and the mayor, albeit it forms part of the financial statements. And I know in the past, Councillor, we have had different views on what has been included in the annual governance statement. So, yeah, maybe as part of this meeting, we can think of how we can communicate that. It's done in a warm spirit. Thank you. Any other questions on the accounts? Charlotte, yes, please. Yeah, just thinking sort of overall at the... So just to clarify, I'm responsible for drafting and collating the statement. A number of people will have contributed to it in May 24. So there's been drafting and there's been redrafting of it. In terms of that challenge process, it is really for the corporate directors to look at the statement critically to make... So I think that's a really helpful observation. Councillor Francis, I know you've got your hand up. Is that in relation to this point? Yeah, then please come in. Thank you. Thanks. And thanks, Charlotte, for flagging this. So I have raised concerns about the annual governance statement previously and earlier in other meetings. And I would acknowledge that there's been some considerable changes to this to incorporate observations about the best value inspection. So I was slightly surprised myself to see that there's more, I guess, reflections on the outcome of the inspection, which took place in 24, 25, than the rationale for it that was given, which was given in February last year. But I really would acknowledge that there's been some, yeah, some changes. So if I look at what's on my page 22 of the supplement, the third paragraph there, it does seem to be quite positively spun. But equally, I think the paragraph above, where it says that the Secretary of State is satisfied the authority is failing to comply with the best value duty for the themes of continuous improvement, governance, leadership, culture, and partnerships. And then the final paragraph on my page 22 here, it says about the Secretary of State having the right to review this, and also it says about the quarterly updates. So I guess as a kind of a statement of fact, I feel much more comfortable with this. Like, this isn't an annual governance statement that I think fully reflects how serious governance had deteriorated in Tower Hamlets Council before the inspectors were appointed. But I think that there is, it'd be fair to say that there's some improvement here. Thank you, Councillor Francis. Anybody else want to comment on the annual governance statement? I think from my perspective, when I read the pages 21 and 22, so the comments on the peer review from the LGA, but also on the best value inspection, I, on first reading it, felt it was unbalanced in some ways. I felt that in particular with the LGA peer review, there was a lot of focus on the good points of the review, and there was less discussion in this statement on the criticisms that came out of the peer review. And I actually went back to read the peer review, and the executive summary, and I can see that quite a lot of the executive summary hasn't even been referenced in this annual governance statement. Similarly, I think in the best value inspection section, I agree with Councillor Francis in that there is more fact in here, rather than subjectivity. However, it's quite process-focused, and less conclusive around some of the findings. As a document that is there to describe the governance of the council, it's not one that I necessarily feel comfortable, slightly honest about it, so I do agree with Charlotte's observations as well. I think our comments as a committee need to be noted and need to be reflected in the minutes, but also we need to find a way of communicating, as a committee, our views, albeit, I appreciate there are differing views around this table, but there has to be a way that we need to make sure that these are being escalated to the senior management of the council as well. Councillor Raleigh. Thank you, Chair, I think you and Mark, in a sense that, the council wants to show that it's good, does that make any sense, even though there have been the best values in the peer review, they're not going to put in those bits, and I didn't ever think they would, and my question then is, when these statements are put together, maybe I'm naive. So it's an exercise in collating information, it's quite a long document, that takes some time, I'm piecing together various pieces of information from the responsible for that process, and I would own that document in terms of the drafting process, and as part of this and its finalisation, I would get additional challenge from the external order to come back and make it, but there was no, you know, I can assure you there was no pressure applied to me in this instance. Thank you, David. Councillor Ahmed. I think it's around that, doesn't really project harmony in a way, I think, I think it's, it's quite... Sorry, I'm going to interrupt here, Councillor Ahmed, because I don't want this committee meeting to become a ground for political debate. I think Councillor Raleigh's question was around independence, and I think the officer answered that appropriately and gave the assurances that we as a committee need on that. I appreciate that, Chair, but I think you probably should have stepped in a little bit. I'm trying to get a probe a bit more, so I do apologise if I've made anybody feel uncomfortable. Thank you, Councillor Raleigh. I hope we can move on from that now. Thank you. So, I have another question, which is to do with the governance issues and the actions and the outcomes. So, similar to the recommendations that we've received from the external auditors, how will we as a committee be getting assurance over the progress of these actions as well? When do you think will be, that will be reported back to us as a committee, or will it be, will it be annually? Will it be quarterly? What's the, what's the process? Well, look, at the very least, it certainly comes back as the next iteration of the annual governance statement, which we need to kick off, as they should be in line with these timescales. Chair? So, do these go to any other forum at the moment? Do they go to an executive forum or any other committee? Virtual service plans, their business plans, and so on and so forth. I think we as a committee should be getting assurance on when the, on, that these actions are being progressed in some way, and in particular, if they're not being actioned, or if they're not being progressed. So, maybe that's something, David and Julie, we could take offline and think about the best way. I don't want to give you, I don't want to create extra work for you, but I want to make sure that we, as a committee, are getting the right levels of assurance, and annually doesn't feel frequent enough, to be honest with you. Yeah, so maybe we could, could we put that as an action, please, for Hannah? Thank you. Any other questions on the annual governance statement, or on the question, oh, I do apologize. Councillor Francis, please come in. Thanks, that's okay, I've only just put my hand up, so yes, just on the AGS, so my recollection is that, as chair, do you sign the accounts, you're not responsible for the content of the annual governance statement, but I might be wrong about that, so I just wanted to seek clarification. So, as chair, I sign the statement of accounts, to which the annual governance statement is included, so I'm not proposing that I won't sign the accounts, I think it's, I think that would be unfair to propose that, so as long as the committee are happy to approve the accounts, and I think I would look to sign those, but I would make, want to make sure that our comments about the annual governance statement are documented as part of the minutes, and I think as well, we need to think about a process for how audit committee feeds into governance statements going forward, and whether we see them at an earlier stage, in order to, if there's, you know, significant changes that we want to see, that there's time for those to be reflected, so I'm conscious we've got a backstop date of four days' time, and I wouldn't want the hard work of officers in preparing these accounts, and going through the audit to be negated. We've spent quite a lot of time talking about the annual governance statement, does anyone have any questions on the accounts themselves? Because I do, I have a couple of questions on the accounts, so let me just bring up my notes. Okay, one was to do with the income and expenditure statement, so Asana, I might just direct this to you, so there's been quite a significant increase in expenditure for housing and region, and the HRA, could you just explain the reasons for that, I'm presuming it's to do with the insourcing, but it'd be helpful to hear from you on that. Yeah, so the key driver around that on the expenditure line is around valuations, so when there's a change in valuation, if there's a loss in valuation, it shows up as an increased expenditure in the gross expenditure line, if there's an increase in valuation, it will show up as a credit. So under H&R, that's particularly relating to temporary accommodation assets, so the valuation of temporary accommodation assets reduced, and that's the key driver behind that reduction or increase in expenditure, and that was because of the assumed rental income from those TA's assets, that's the key driver from LHA rates to social housing rates, so broadly speaking, social housing rates are about a third of LHA rates, so that's had an impact on the valuations in reducing, so it's had an impact on the expenditure increasing. Likewise for HRA as well, so the key driver behind the movement in increasing expenditures largely around the loss or the decrease in valuation of those council dwellings and the valuation of those council dwellings, so we commissioned a third party, WHE, to do our council dwelling valuation, so I think it's probably twofold there. The first key driver behind the loss in valuation is around the land registry data and what's that sowing year on year, and the other key driver in terms of the loss of valuation is, it's quite a technical point, so I'll keep it as simple as I can, so when we bring assets and make them operational from assets under construction, so in 23-24 we had a number of estates and housing blocks that became operational, got handed back to us, so we need to, as soon as they get handed back to us, we need to do a valuation exercise, so they will come over on cost, but under the rules and the guidance when it comes to valuing social housing, you can only apply 25% on the market value, so it immediately drops. So there was a number of blocks and estates that were handed back to us and we immediately incurred a valuation loss on those because of accounting rules and valuation rules. So it's largely down to valuations. Okay, thank you. I'm nodding along like I completely understand everything you're saying, which is not true, but that's not to do with you, that's to do with me, but maybe at a separate time we can have a separate briefing. Prepare a briefing paper if that helps as well, Chair. Yeah, or maybe a separate conversation another time. Thank you. My other question relates to the balance sheet and the pension asset was now showing a zero for the current year, which struck me as odd and I just didn't understand why that was. So it largely relates to the LGPS fund. So at the end of 22-23, we had a net asset for about 20, just over 20 million in regards to that fund. So when you compare the liability and the assets, we had a net asset of 23 million. That's substantially increased in 23-24 to over 200 million. So we've got a surplus position and increased drastically because of the investments associated with the fund. But there is a technical accounting adjustment that we do called an asset ceiling calculation. And that effectively is a calculation that our actuary does to recognise, well, it's a prudent estimate to dampen down that surplus recognition and it's only for accounting purposes. So that asset ceiling calculation was substantially higher in 23-24 than in 22-23. So we actually brought it down into a liability. So it goes from a pension asset reporting in the accounts in 22-23 to a pension liability. But that's because of that accounting calculation that we do. That doesn't feature in any of the triennial valuation work that our actuaries will do. And it's not in relation to the funding adjustments that we do as part of contributions we're making. So we have increased our, in terms of the asset, we have got a surplus asset. It's just for the accounts purposes, it's this asset ceiling calculation we do. Thank you. It is in surplus and the surplus has increased. That's a great explanation. I understood that one. So thank you. And then my final point is relating to page 115. So under Priority 2, Homes for the Future, there's a bullet point that says delivered 459 affordable homes in 23-24, and I wanted to just understand where that number comes from. And the reason I'm querying it is because I actually raised an inquiry on that. Back in the summer, after I saw something that was published in the council's newspaper around numbers of housing, numbers of homes being delivered, and when I got the response back, that 459 was not just what had been delivered by the council, but what had been delivered by developers as well, so private providers. So it relates back to our strategic performance that's reported. So we liaise with our strategic performance reports that are done on a quarterly basis with our budget monitoring reports. So it's the key information and the stats that feed back from there. I can certainly have a look at that, Chair, in terms of that breakdown, if it's something that we've delivered or we've delivered, but I don't have that answer to hand immediately. Thank you. I think it might just be out to clarify whether it's what the council as an entity has delivered or what's been delivered in the borough by the council and others. Thank you. Any other questions? I'll put a proposal forward. Yeah, but it's... So the proposal you're making, as I understand it, is to make a change to the annual governance statement. So we as a committee, we don't own that statement and we don't write that statement, so we can't change it, we can certainly propose that to management and I'm happy to support that. So we can include that as an action for sure. Yeah. Thank you. In that case, I'll move on to the recommendations. So are the committee happy to approve the statement of accounts? Yeah. Are they happy to approve the letter of representations for the council and pension fund accounts? We have noted and considered the updated annual governance statements and we have considered the control environment recommendations and management responses and we have also considered the four risks or weaknesses made under the value for money conclusions of which three recommendations are made under Section 24, Schedule 7 of the Local Audit and Accountability Act 2014. Thank you. And can I just say thank you and well done to David, Hassan, Abdul Razak and Julie. I appreciate the work and effort and also your explanation of and answers to our questions as well. So thank you very much. The next item then is 3.2, which is Treasury Management Strategy Statement and Capital Strategy. And Paul, I'll do, that's, oh, I'm sorry, Hassan, you'll be presenting that with me. Paul, yeah, I'll come in after Paul if he wants to. Yeah, I'm happy for the report you've taken as read, Chair. So, Hassan, did you want to come in after that? Yeah, so just to highlight, the Treasury Management Strategy sets out the Council's strategy for management of the Council's Treasury investments and debt portfolio, including potential new borrowing for the financial year. The Investment Strategy, which sets out the Council service and commercial investments, policies for managing existing investments and the governance decision-making arrangements. The Capital Strategy Report are the key documents. So there's three key documents that underpin the Treasury Management Strategy. The key strategy that I wanted to draw to members' attention is the Capital Strategy Report, particularly around the minimum revision provision policy that we're asking committee to approve. So a little bit different to what you're used to in previous years, is we're asking for an in-year update to the 24-25 MRP policy, as well as approving the 25-26 MRP policy. And this is in relation to our MRP calculation. So in consultation with third-party support around the MRP guidance, we've looked to revise our policy to ensure that the debt financing or the capital financing in relation to our unfinanced capital expenditure is more closely linked and related to the cost of borrowing. Also, we deem it to be, and this is in the guidance itself, it better reflects the related charge to taxpayers as well, council taxpayers to charge us here particularly. So I just wanted to draw members' attention to that particular policy. Happy to take any questions. Thank you, Hassan, and thank you, Paul, for your report. Any questions, committee members? I had one question which was to do with the increase in borrowing. So there's some assumptions that have been made in the strategy and in the reports around the wider economy and interest rates. What are the checks in place to, so if those assumptions are found to be untrue or incorrect and something significant changes, what would prevent, yeah, what are the checks in place to actually say, actually we want to take a different strategy and not borrow as much or borrow more? So decisions around borrowing will be brought back. So it's not, this is, this sets out the principles around the checks and the controls. We monitor treasury management as part of our quality, quarterly reports when it comes to budget monitoring. So we provide members with updates in our budget monitoring reports on the treasury position. So we monitor that closely. We also provide a mid-year update. So members will receive a mid-year update. We provided a 24-25 mid-year update at the December audit committee in terms of performance against targets and strategy and how we're doing on that front. And we reported if any breaches take place against prudential indicators. So we're constantly monitoring these things for which there have been none. So we're constantly monitoring these things and we'll report back to you. Although it's a three-year strategy, it's updated every year. So you review this and we'll review the assumptions behind the prudential indicators and those checks and controls that we put in place every year to ensure that they are still fit for purpose and reflect the financial climate and environment. It's just a budget and, you know, as part of our monthly monitoring, we'll look at our outturns. So, for example, if there's any slippage, if we get any additional money, we do substitutions. So we manage as part of our treasury management. That's really helpful. Thank you. Any questions? Okay. In that case, can I ask the audit committee to recommend to council to approve and adopt the policies and strategies at 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6? Yeah. Thank you. I'll then move on to 3.3, internal audit and anti-fraud implementation of recommendations. And that's for David to present. Thank you. Self-attest how they were doing against all the recommendations that we raised. We're proposing a departure from that. And the drivers for that really are the new global standards, which were trailed in more limited assurance order reports, which means that commitment to actually do a follow-up audit within 6 or 12 months becomes quite hard to meet. At the time, actually just doing follow-up work. So that became quite challenging. In terms of this process, what we're proposing is, and what is paper, 163 individual audit recommendations. And when I say follow-up, what we will do is, the process is, we will ask management to attest the outstanding audit recommendations. And you'll see those highlighted in the appendix in terms of how that follow-up process will look and exercise. I'm quite happy to take any questions, Chair. Thank you, David. Charlotte, please. Yeah, thanks, Chair. Thanks, David. I just want to say I do like a dashboard. Thank you. So for half the team, David, are working on this part. What's the impact on delivery of the audit plan for this year? Well, look, our primary goal and our primary aim as the team is to deliver that year-end audit opinion on the resource in a way I think is comfortable in achieving that. Now, we could throw a lot of resource at it, but it would mean immediately curtailing the ongoing audit work, which I wouldn't be comfortable in doing. So there's a balance to be struck. I think we're okay at the moment, but we do need to make sure it's a balancing act at the moment. Okay, thank you. So committee members, when we discussed about having this extraordinary meeting, we talked about having certain directorates coming and presenting to us on their audit reports and also on risk. And I think we looked at the report that was provided to audit committee in December. This is now, I think, an update of that, and I think it would be helpful to think what areas would we want to go into a bit more detail on and potentially have directors come to present to us in a couple of weeks' time at this extraordinary meeting. Please come in, yeah. Just to be mindful that this week, I would ask for that discretion. Thank you, Councillor. So I think in scheduling that meeting, Farhana did reach out to committee members and ask for availability. And I think the timing of that meeting has been proposed to begin a little bit later, so 6.45. So I do hear you, and I am respectful of, you know, the Holy Month, for sure. So I think the statutory recommendations and getting an update on those and a proposal for how they're actioned is something that we should have sight of. And I don't think waiting until April to do that. So our ordinary meeting is, I think, is at the end of April, yeah, towards the end of April. So I think we should definitely have the statutory recommendations from EY. And the proposed action come to the meeting on the 13th of March. What else did we say that we wanted to bring to that meeting? Chair, can you not incorporate this meeting with everyone to make it the same meeting? I don't think so, to be honest with you, Councillor, because our ordinary audit committee meetings are generally quite packed. And I think my observation and the observation of others, when we met informally in January, was that we haven't necessarily had sufficient time within those ordinary meetings to really get into the detail and have sufficient challenge, but also sufficient assurance from management on audit and risk. I think we hear a lot from David and from Julie, but actually the people who are responsible for risk management are the management. It's not necessarily, and we need to be sort of broadening who we speak to, I feel. Julie, do you want to come in on the statutory recommendations and the proposed process for that, please? Well, the proposed process for that 30-day requirement. 30 days, Councillor. From, from, to, in terms of calendar day, what would be the calendar day? The 30 days will be in a few days' time. So it will be during, it will be during Ramadan still. So why don't, why don't we, I mean, that meeting, do we need to be in person for that? Can it be online? Is there anything to approve or do we as a committee need to have that discussion and be comfortable with the course of action being proposed? Responsibilities is, is your call, but I do think we need to. So, yeah, I mean, I think, sorry, Jill, come on in. I don't think the meeting, for it to be a core at meeting. Thank you. Councillor Ahmed. Chair, totally appreciate the intricacies of, and the importance of having that, we propose a change of time, if we can. So, I think we can look at the change of time. I don't know whether we're going to be able to do it during the day, but we can maybe look at an earlier start. But I will leave that in Fahana's capable hands. What I would also suggest is that we keep that meeting quite short. So we keep it to the statutory recommendations that we need to review. What I'd also like us to do in that meeting is just spend some time thinking about what are the areas that we want to delve into, and we'll see whether we can start to incorporate those into the ordinary meetings in April. And I think that maybe we can take a view at the April meeting as to whether we want to have a separate meeting just to focus on audit recommendations. I think where we've had David's really helpful report and the activity you've been doing to update the recommendations, I think that is a good basis for us to almost draw a line under some of the previous performance around actioning audits, actioning audit recommendations, so we can draw a line there and start maybe to move forward into a new area. Are people comfortable with that? Councillor Francis, are you comfortable with that approach? Yeah. Good. Charlotte, are you comfortable with that as well? Right. Thank you. So thank you, David, for your report, which we have considered. I'm then going to move us on to Section 4, which is exclusion of press and public. Can I just... Sorry, Chair, before... Councillor Francis, you've got your hand up here. Where is that to take us into... Is that to do with Julie's comment on the report? It wasn't going to be in response to that. It was... But I was going to ask a couple of points about that, if we were going to go into a private session. But so I've got a report that's a page and a half long that says that there's going to be a discussion, but it doesn't really say what's in it. Is there something else? So why don't we go into a private session and then I think we can have an open discussion, given our previous discussions as an audit committee on this. I would be a little bit... I would be hesitant having a public discussion on this, given we've got limited information in the report and that this committee has been privy to more detailed information in private. And I think it would be helpful for us to get an update on that broader information as well. Can I just ask before you do that, if it's okay, two things. First of all, so when we've had this conversation around this issue in the past, we've recorded it. So can I ask that we record it again for future reference? And secondly, so my understanding is that at a cabinet meeting a month and a half ago, the mayor quoted at length from one of the restricted pink papers that went to this audit committee last June. And I just wondered if that's the case. Is this now a public... Is that document now a public document? Is that what should have happened? Thank you, Councillor Francis. So I have raised that separately with the chief executive, the Section 151 officer and the monitoring officer. And I have had a response late this afternoon on that, which I've not had the chance to read in detail. So I suggest we go into the private session where we can have a more open discussion regarding the issue at hand. Thank you. Farhana, in that case, please could you exclude the press and public and make sure that the next section is recorded? Thank you. Information defined as exempt in Part 1 of Schedule 12A to the Local Government Act, 1972. That's it. That's it. Can you get a seconded? Just second that. Could someone second that, please? I second that. Thank you. I'm sorry. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.