The Governance, Audit, Risk Management and Standards Committee of Harrow Council met on Tuesday 31 January 2017 to review several key reports concerning the council's financial health and operational procedures. The committee noted reports on the External Audit Plan for 2016-17, the Audit Report on Grant Certifications for 2015-16, and the Internal Audit and Corporate Anti-Fraud Team's mid-year progress. They also reviewed the draft Risk Management Strategy and Policy for 2016/17-2019/20 and the Treasury Management Strategy Statement for 2017/18.

External Audit Plan 2016-17

The committee received a report on the External Audit Plan for 2016-17 from KPMG, outlining how the audit of the council's and Pension Fund's accounts would be conducted. Emma Larcombe from KPMG presented the plan, detailing the estimated materiality levels, the scope of audit work, and identified significant risks. These risks included management override of controls, valuation of property, plant and equipment, and pension liabilities. The committee discussed the audit timescales, with interim audits in March, final accounts audits in June/July, and the formal report in September. Questions were raised regarding the auditors' approach to property valuations, with confirmation that KPMG uses an independent valuation team to check individual cases. The committee also discussed financial resilience and the long-term impact of borrowing for the Regeneration Programme, which KPMG confirmed would be assessed. Concerns were raised about the low general fund reserves of £10m and the criteria used for such judgements, with Ms Larcombe undertaking to provide further detail. The committee confirmed its satisfaction with the arrangements in place for fraud.

Audit Report on Grant Certifications 2015-16

Emma Larcombe of KPMG presented the Audit Report on Grant Certifications for 2015-16. The report summarised the outcomes of audits on three claims: the Housing Benefit Subsidy, Teachers' Pension Contributions, and the Pooling of Capital Receipts. Only minor issues were identified, and Ms Larcombe confirmed that there had been no adverse impact on the council regarding the Housing Benefit Subsidy claim.

Internal Audit and Corporate Anti-Fraud Team: Mid-Year Report and Plan Update 2016/17

The committee received a mid-year report on the work of Internal Audit and the Corporate Anti-Fraud Team. The report detailed performance data, updates to the audit plan, and introduced an upcoming Internal Audit peer review. The Corporate Anti-Fraud Service Manager clarified that the reported figures for fraud represented estimated notional values rather than actual funds recovered. Members raised concerns about the resources available to the Anti-Fraud Service, particularly regarding the volume of housing cases. The Head of Internal Audit explained that resources were targeted at areas of greatest risk and that challenges in meeting deadlines could arise due to unplanned work and staff maternity leave. The deferral of the audit of the Regeneration Programme was discussed, with the Head of Internal Audit explaining that this was due to staff resource constraints and the need to prioritise emerging risks involving financial irregularities. The Corporate Director, Resources and Commercial, confirmed that priorities were regularly reassessed. The committee also heard about the No Recourse to Public Funds workstream, which involved partnership working with the Police and other agencies to combat identity fraud.

Risk Management Strategy and Policy (2016/17- 2019/20)

The committee reviewed the draft Risk Management Strategy and Policy for 2016/17 to 2019/20. A Member suggested that the strategy should acknowledge the possibility of a change in political administration in May 2018. The Head of Internal Audit noted that the documents were subject to annual review and this could be addressed then. A discussion ensued regarding the council's debt figures, with a Member questioning whether the stated debt of £334m, compared to an anticipated overall debt of £689m, could be considered low to medium levels of financial risk . The Head of Internal Audit agreed that the higher figure could be included and that the judgement on risk reflected the views of senior management. The Corporate Director, Resources and Commercial, added that the draft policy would be considered by Cabinet, providing further opportunity for comment.

Treasury Management Strategy Statement including Prudential Indicators, Minimum Revenue Provision Policy Statement and Annual Investment Strategy for 2017/18

The Director of Finance presented the Treasury Management Strategy Statement for 2017/18, which included Prudential Indicators, the Minimum Revenue Provision Policy Statement, and the Annual Investment Strategy. The Director confirmed that information on precepts and levies would be provided in March. No comments were made by the committee on the draft strategy.

All reports were noted by the committee.