The meeting of the Audit Committee was scheduled to discuss a range of topics including external and internal audits, a new risk management strategy, the Council's complaint handling performance and the potential appointment of a new independent committee member. It is important to note that this summary is based only on the documents provided to the meeting’s attendees, and that we do not know whether these topics were actually discussed, or whether any decisions were actually made at the meeting.

Appointment of an Independent Member to the Audit Committee

A report by the Head of Legal and Democratic Services, Karen Dunn, asked the Audit Committee to recommend to the Council that the size and composition of the Audit Committee be changed to include an independent member who would not have voting rights. The report argued that such a change would be consistent with the recommendations of Sir Tony Redmond's 2020 independent review into local authority audits. It would also align the Council with the guidance issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). The report suggested that the Head of Finance and Revenues, Carl Whatley, work with the Chair and Vice-Chair of the Audit Committee and the Portfolio Holder for Finance and Resources to set an appropriate level of remuneration and expenses for the new role, and then carry out the recruitment process.

External Audit update

A report by the Head of Finance and Revenues, Carl Whatley, provided the committee with an update on the external audit of the Council's 2022/23 and 2023/24 accounts. This report included the external auditor's completion report for 2022/23. The report pack also contained a report, prepared by KPMG, on the recent audit of the Council's Housing Benefit Subsidy return. This is an annual inspection that is undertaken to ensure the accuracy of the funding the Council claims from the Department for Work and Pensions.

The Committee were asked to note both of the audit reports.

The report by the Head of Finance and Revenues explained that due to the nationwide backlog of local authority audits, the Council’s external auditor, Ernst & Young, were unable to complete a full audit of the 2022/23 accounts. As such they would have to issue what is called a disclaimer of opinion[The external auditor states that they do not have enough information to provide an opinion on whether the accounts are accurate.]. The report is clear that this does not mean that there are likely to be errors in the accounts, rather that it is a technical requirement because of the non-completion of the full audit.

Because the deadline for completing the 2023/24 audit is 28 February 2025, the meeting’s attendees were asked to approve the addition of an extra Audit Committee meeting on 17 February 2025 to consider the outcome of that audit.

Internal Audit Progress Report

The Internal Audit Progress report provided an update on the progress made by the Council’s internal audit team in completing the Internal Audit Plan for 2024/25. It explained that 13 of the planned 27 reviews had been completed, with 9 in progress and 5 yet to be started.

In June 2024 the Audit Committee asked for more detail about any outstanding high or medium-risk actions from previous internal audit reviews. In response, the Internal Audit Manager reported that there were two outstanding actions.

One action related to Procurement procedures, which had been identified as needing improvement. In particular, there were issues around the process of completing high-value contract procurements. Specifically, Internal Audit were concerned that contracts were not always being completed in accordance with the Council’s Contract Standing Orders, and that complete, signed copies of contracts were not being retained in all cases.

The second outstanding action related to reviews of council tax, business rates and housing benefit records. The agreed action was for the Council to undertake regular reviews of discounts, reliefs, exemptions and credit balances.

The Internal Audit Manager reported that progress on both of the actions was being managed and that either work was progressing towards resolving the issues or that interim measures were in place.

The report also proposed the addition of an audit of corporate project management to the plan and recommended several reserve audits for quarter 4, if capacity allowed.

Annual Corporate Complaints Report - 2023-24

The annual Corporate Complaints Report, prepared by the Policy Manager, Jonny Lloyd Davidson, provided a summary of all complaints that had been received by the Council during the period 1 April 2023 – 31 March 2024. The report showed that the Council had received a total of 184 complaints during that period, a decrease of 6.6% from the previous year, when 197 complaints were received.

The report showed that most complaints were received by the Environmental Services and Planning and Building departments, who received 74 (40.2%) and 42 (22.8%) respectively.

The report pack contained several annexes, one for each service, which provided a breakdown of the complaints received by each department and identified any learning points.

The Environmental Services Annex included two complaints about recycling. In one, a resident was unhappy that they had received a letter warning them about recycling contamination when their bin was emptied. The resident believed that a neighbour was at fault, as their bin had been placed alongside other bins. In their response, the Environmental Services Manager apologised for the upset or concern caused and explained that the resident’s address had been misidentified. In another case a resident complained that litter had been left by bin collectors. The Waste Operation Supervisor spoke to the complainant and assured them that crews would be reminded of their obligation to clear up all litter.

The Planning and Building Annex included examples of complaints related to the length of time it took for the Council to respond to planning applications, enforcement investigations and requests for information. In each case, officers provided a detailed response, and where appropriate, apologised for the delay and set out the steps that would be taken to ensure that such a delay would not happen again. For example, in one case, the Council apologised for a delay in dealing with a planning application, explaining that it had been caused by resource issues and how consultee responses were managed.

The Community and Leisure Annex included an example of a complaint that was made about a lack of response from the cemetery service. The officer responded to the complaint by apologising for the lack of response and confirming that they had spoken to the relevant officers to ensure they met the Council’s standards when engaging with the public.

30 complaints (16.3%) were escalated to Stage Two of the Council’s formal complaints procedure, which means that they were investigated by the Chief Executive.

The report also provided an update on the number of complaints the Council received from the Local Government and Social Care Ombudsman (LGSCO).

10 new complaints relating to Test Valley Borough Council were received by the LGSCO during the reporting period. The LGSCO decided on a total of 12 complaints, including 2 that were received in the previous reporting period.

The LGSCO decided to investigate 1 of these 12 complaints, and did not uphold it.

Risk Management Strategy

A report by the Internal Audit Manager, Jan Balfour, asked the Audit Committee to approve a new Risk Management Strategy for the Council. The report explained that the Council had a pre-existing strategy, but that it had been updated to reflect recent changes to best practice guidance.

The report explained that the purpose of the strategy was not to eliminate all risks, but rather to provide a framework that enabled the Council to make informed decisions about how to manage them. The report argued that it is impossible to eradicate risk altogether, because some risks are inherent in the activities that the Council undertakes.

The report explained that because of the diverse range of services provided and activities undertaken by the Council, it would be impossible to define a single risk appetite. Instead, decisions about how much risk to accept must be made by assessing each individual case.

The strategy sets out the responsibilities of the Audit Committee, Councillors, Management Team, Heads of Service and Internal Audit for risk management, and explains how risk should be managed as part of decision making processes and in projects.

Use of the Regulation of Investigatory Powers Act 2000

A report by Karen Dunn, Head of Legal and Democratic Services, provided an update on the Council’s use of its powers under the Regulation of Investigatory Powers Act 2000, commonly referred to as RIPA.

The report explained that RIPA provides a legal basis for the Council to authorise certain kinds of invasive investigations. For example, RIPA allows local authorities to carry out what it calls ‘directed surveillance’ or to use ‘covert human intelligence sources’ for authorised purposes.

The report explained that these powers can only be used under very specific circumstances.

For example, directed surveillance can only be authorised if it is necessary for the purpose of preventing or detecting crime or preventing disorder, or if it is needed for investigations related to the sale of alcohol, tobacco or nicotine products to minors.

Intrusive surveillance, such as planting a listening device in a private home, is not permitted under any circumstances.

Directed surveillance can only be authorised if the authorising officer is satisfied that the action is necessary and proportionate, and they must also consider whether the investigation is likely to intrude on the privacy of anyone who is not the target of the investigation.

The Council must also apply for approval from a Justice of the Peace before they can carry out any covert surveillance.

The report acknowledged that the Home Office recommends that local authorities regularly report on their use of RIPA powers to elected members. The report confirmed that Test Valley Borough Council had not used its powers under RIPA since 2018.

Audit Committee Work Programme

A report by Carl Whatley asked the Committee to approve an updated work programme for the following year.

The report explained that the programme was based on a number of cyclical reports that are required to be considered by the Committee as part of its terms of reference and any emerging themes. For example, the updated programme included items on internal and external audit updates, the annual corporate complaints report, the risk management strategy, the appointment of an independent committee member and an annual RIPA update.

The report also confirmed that an additional meeting had been added to the work programme for February 2025 to consider the outcome of the 2023/24 external audit.

The committee was asked to consider whether any other items should be added to the work programme before it was approved.