The Audit and Governance Committee of Sutton Council met on 18 January 2024 to discuss arrangements for a Code of Conduct Hearing Panel, review the council's risk register, and receive updates on treasury management and internal audit progress. Key decisions included the establishment of the Code of Conduct Hearing Panel and the delegation of authority to it, alongside noting the updated risk register and progress reports.

Code of Conduct Hearing Panel Arrangements

The committee agreed to establish a Code of Conduct Hearing Panel and delegate authority to it to conduct hearings as set out in the Standards Regime Complaints Procedure, subject to Council approval. This decision aims to ensure a mechanism for dealing with complaints against councillors, with a provision for decisions on whether a complaint merits investigation to be made within 14 days. The panel will not have the authority to suspend a member, but can impose sanctions within legislative limits. The committee also noted the outcome of a recent panel hearing where a member was found to have breached the Code of Conduct, and resolved for the Chair to write to Councillor Mattey encouraging compliance with the panel's recommendations. Councillors Tim Crowley, Mike Dwyer, and Sheila Berry voted against this recommendation.

Review Risk Register and Discuss Mitigation

The committee reviewed the council's updated Corporate Risk Register, noting a new risk concerning financial and service pressures arising from the rising demand for Education, Health and Care Plans (EHCPs). Officers explained that this is funded by the Dedicated Schools Grant (DSG) budget, which is facing projected deficits across many local authorities, including Sutton. The committee also discussed the risk associated with unregistered residential homes for children, noting that the risk rating had reduced due to one facility becoming Ofsted-registered, and that the council was supporting other facilities in their registration process. Further information was requested regarding the means-testing of transport for children with special educational needs and disabilities (SEND), and the council's procurement processes were clarified to include enhanced financial checks. The complex relationship between the NHS and the council in determining funding for individual care needs was acknowledged as a challenge being addressed collaboratively with partners.

Learning and Development Plan for Members of the Audit and Governance Committee

The committee noted the proposals for learning and development to ensure members are adequately trained and prepared for their roles. This plan includes access to LGA and council e-learning modules, induction sessions, specific training on the Code of Conduct, whistleblowing, treasury management, and pre-committee training sessions as required. The aim is to enhance the committee's effectiveness in scrutinising the council's governance and control arrangements.

Mid-Year Treasury Update

The committee received an update on the council's treasury management activities for the first six months of the financial year. Officers clarified that interest earned on capital investments using grant money can be used as general revenue, and explained the forecasting and monitoring processes for grant money, capital expenditure, and cash balances. The council's approach to long-term borrowing was discussed, with officers explaining the strategic decision-making process regarding funding capital expenditure through borrowing or using cash balances. Borrowing from other local authorities was considered low risk, provided it is approved by the Section 151 Officer. The committee noted that all treasury management operations complied with the council's Treasury Management Practices and the Prudential Code.

Internal Audit Progress Report

The committee reviewed the progress of the Internal Audit plan, noting that 67% of the plan was completed by the end of November 2023. The report detailed 24 audit assurance opinions issued, with 92% providing reasonable assurance and 8% substantial assurance. 112 audit recommendations were issued, with 71% classified as Priority 2 and 27% as Priority 3. The committee discussed the issue of duplicate creditor payments, with officers confirming the system's effectiveness in identifying and resolving them, and that steps had been taken to reduce human error through training. It was confirmed that internal auditors are not directly affected by the council's recruitment freeze. The committee requested that future reports include target dates for outstanding External Quality Assessment (EQA) actions. The issue of IR35 checks for agency staff was also discussed, with officers agreeing to follow up on the availability of evidence for these checks.

Value for Money External Audit Progress Report

It was noted that the value for money external audit progress report would be presented at a future meeting.

Provisional Work Plan

Officers informed the committee that an in-person training session on treasury management would be organised before the next meeting.