The Audit and Standards Advisory Committee of Brent Council met on Wednesday 12 June 2024 to review the Council's financial performance and governance arrangements. Key discussions included the Annual Counter Fraud Report, the Internal Audit Annual Report, and the draft Statement of Accounts for 2023-24. The committee also considered the External Audit Progress Report and the Annual Governance Statement.

Standards Report

The committee received an update on gifts and hospitality registered by members during the fourth quarter of the 2023-24 financial year. It was noted that all members had completed their core mandatory refresher training, with ongoing sessions planned for the new municipal year. No specific limits were set for the value of gifts or hospitality that members could accept, with the requirement being to register items valued at £50 or more.

Annual Counter Fraud Report 2023-24

Darren Armstrong, Deputy Director Organisational Assurance and Resilience, presented the Council's Annual Counter Fraud Report for 2023-24. The report highlighted the Council's robust approach to tackling fraud and corruption, combining proactive prevention and detection activities. Key findings included:

• Internal Fraud: 27 new referrals were opened, with 10 cases identifying fraud or irregularity. These related to theft, conflicts of interest, recruitment irregularities, and external offences by staff.
• Tenancy and Housing Fraud: 16 fraudulent housing cases were concluded, with a notional value of £672,000 recovered. Referrals from Housing Management were noted as crucial for detecting these frauds.
• External Fraud: 300 new cases were opened, a significant increase from the previous year. Blue Badge fraud accounted for 75% of these referrals, with 213 successful outcomes, including 38 prosecutions.
• Proactive and Other Activity: This included National Fraud Initiative (NFI) data matching reviews, which identified significant savings, particularly in Council Tax Single Persons Discount cases (£1.1 million annually). The Council's participation in the NFI London FraudHub also yielded savings, including £175,500 from identifying Blue Badges against deceased records.

The committee noted the increase in external fraud cases and the resource allocation to address these. The report also detailed the Annual Counter Fraud Plan for 2024-25, outlining how resources would be deployed to prevent and detect fraud.

Internal Audit Annual Report 2023-24

Darren Armstrong also presented the Internal Audit Annual Report for 2023-24. The report indicated that the Internal Audit function operated independently and objectively. Key points included:

• Audit Plan Delivery: 32 audits were planned, with 32 completed, 2 at draft report stage, 3 with fieldwork completed, and 3 in progress.
• Internal Audit Opinion: The Head of Internal Audit provided a Reasonable Assurance opinion, stating that the Council's framework for governance, risk management, and internal control is adequate, with some improvement required.
• Areas for Improvement: The report highlighted the need to address 'second line' gaps in control, improve the rate of implementation of audit recommendations, and address the absence or outdatedness of policies and procedures.
• Internal Audit Charter: The charter was revised to reflect changes in the Head of Internal Audit's role, now Deputy Director Organisational Assurance and Resilience, and to outline safeguards for maintaining independence.

The committee resolved to note the outcomes of the internal audit work, the annual opinion, and the revised Internal Audit Charter.

External Audit Progress Report and Sector Update

Sophia Brown, the External Auditor from Grant Thornton, provided an update on the progress of the 2023-24 financial statements audit. The initial planning was complete, and no additional risks were identified. The audit was scheduled to commence in late June 2024, with an aim to issue the audit opinion by 30 September 2024. The committee also noted the ongoing delays in local audit nationally and the potential impact on the timing of Value for Money (VFM) work.

The report also included sector updates on topics such as the LGA's Improvement and Assurance Framework, the State of the Locals report on public trust, and new guidelines for council 'productivity plans'.

Draft Statement of Accounts 2023-24 Update

Ben Ainsworth, Head of Finance, presented the draft Statement of Accounts for 2023-24. Key points noted were:

• The accounts were published a month earlier than the previous year to meet the statutory deadline of 31 May 2024.
• A slight delay in finalisation was due to additional general fund valuations, but this was not expected to materially impact the accounts or the audit schedule.
• The report included a detailed narrative section explaining the Council's financial performance, strategic vision, governance, and key risks.
• The General Fund reported a breakeven position after a transfer from corporate contingency covered overspends, primarily in Resident Services (£11.2m) due to increased demand for temporary accommodation, and pressures in Children's Social Care and Adult Social Care.
• The Housing Revenue Account (HRA) reported an underspend of £2m.
• The Council's reserves were noted as substantial, but a significant portion (£489.0m) was earmarked for specific purposes, leaving £20.2m in general reserves, which was considered adequate at 6.2% of budgeted net revenue expenditure.
• The capital programme for 2024/25 to 2028/29 totals £797m, with £213.0m spent in 2023/24. Challenges in controlling capital expenditure were noted, with variances due to project delays and advancements.
• The Pension Fund liability showed a net reduction of £95m on an IAS 19 basis, attributed to strong investment performance.

The committee resolved to note the draft Statement of Accounts, with further clarification sought on specific points regarding HRA reserves and the basis for their calculation.

Annual Report of the Chairs of the Audit and Standards Committee and Audit and Standards Advisory Committee

David Ewart, as Chair, introduced the annual report summarising the work of both committees for the municipal year 2023-24. The report highlighted the growing importance of the committees' work in ensuring good governance, particularly in light of financial pressures on local authorities. Key areas of attention included the 'second line' of defence in governance, the need for updated policies and procedures, oversight of subsidiary companies, and strengthening contract management. The report was noted, and it will be presented to Full Council.

Annual Governance Statement 2023-24

Debra Norman, Corporate Director of Law & Governance, presented the draft Annual Governance Statement (AGS) for 2023-24. The statement outlined the Council's governance framework, based on seven core principles. No significant governance issues were identified for the reporting year. However, several areas for improvement were noted, including better use of the Member Hub, quarterly monitoring of reports, enhancing risk management approaches, and developing leadership capacity. The committee resolved to recommend the AGS for formal approval by the Audit and Standards Committee, with an additional improvement action added regarding the implementation of audit recommendations.

Audit & Standards Advisory Committee Forward Plan and Work Programme 2024-25

The committee noted its Forward Plan and Work Programme for the 2024-25 Municipal Year, with some adjustments to meeting dates and the rescheduling of specific agenda items.

The meeting concluded with the Chair thanking officers and members for their contributions.