Agenda and minutes

To receive any apologies for absence from Councillors.

Apologies were received from Councillor A Filer who was unable to attend as she was currently isolating having come into contact with someone who was displaying symptoms of Covid.

To receive information on any changes in the membership of the Committee.

Note – When a member of a Committee is unable to attend a meeting of a Committee or Sub-Committee, the relevant Political Group Leader (or their nominated representative) may, by notice to the Monitoring Officer (or their nominated representative) prior to the meeting, appoint a substitute member from within the same Political Group. The contact details on the front of this agenda should be used for notifications.

There were no substitutes notified for this meeting.

Councillors are requested to declare any interests on items included in this agenda. Please refer to the workflow on the preceding page for guidance.

Declarations received will be reported at the meeting.

Councillor M Brooke declared an interest in respect of agenda item 7 - Treasury Management Monitoring Outturn 2020/21 and update for Quarter 1 2021/22 as the Council’s appointed representative on the Bournemouth Development Company.

To confirm and sign as a correct record the minutes of the Meeting held on 10 June 2021.

The minutes of the meeting held on 10 June 2021 were confirmed as a correct record.

To receive any public questions, statements or petitions submitted in accordance with the Constitution, which is available to view at the following link:

https://democracy.bcpcouncil.gov.uk/ieListMeetings.aspx?CommitteeID=151&Info=1&bcr=1

The deadline for the submission of a public question is 4 clear working days before the meeting.

The deadline for the submission of a public statement is midday the working day before the meeting.

The deadline for the submission of a petition is 10 working days before the meeting.

There were no public issues for this meeting.

As part of the external auditor’s risk assessment and audit planning for 2020/21 they are required to make enquiries to “those charged with governance” of management processes and the Authority’s oversight of these processes, including material accounting estimates.

The appendices of this report set out the management processes and accounting estimates relevant to the 2020/21 audit for consideration and approval by the Audit and Governance Committee.

Matt Filmer, Acting Assistant Chief Financial Officer presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

As part of the external auditor’s risk assessment and audit planning for 2020/21 they were required to make enquiries to “those charged with governance” of management processes and the Authority’s oversight of these processes, including material accounting estimates.

The appendices of the report set out the management processes and accounting estimates relevant to the 2020/21 audit for consideration and approval by the Audit and Governance Committee.  The Committee was informed that appendix A set out questions to a number of key areas such as fraud and accounting estimates and management had provided responses to these questions.  The intention of the report was to give the Committee the opportunity to confirm its understanding and agreement with the responses.  Members were informed of the key areas which included fraud how the Council detect and prevent fraud, internal policies and controls and how instances of fraud were communicated to the Audit and Governance Committee. There was a series of questions relating to laws and regulations and how the Council complies, an example of this was the sign off of reports for Cabinet and Council by the Monitoring Officer to ensure compliance with legislation. The Acting Assistant Chief Financial Officer referred to related parties, where there may be an arrangement between two parties who have a pre-existing relationship so their may be a conflict of interest.  He highlighted that a good example of a control was the declaration of interests which all Members and senior officers have to make and sign.  The Acting Assistant Financial Officer reported that there was a series of questions on the Council’s internal controls over accounting estimates.  He explained that the auditing standards had been significantly enhanced as a result of some of the public company failings that had been in the media.  The Committee was informed that the accounting estimates were made in the statements and the reason for the auditors scrutinising the estimates in more detail was because they carry a level of risk due to a high level of uncertainty or a significant level of judgement.  The Acting Assistant Chief Financial Officer explained that to help the Committee understand the accounting estimates appendix B to the report sets out the material accounting estimates that were in the financial statements.  The Committee was advised of the controls in place to mitigate these risks. 

The Committee was asked to note on page 57 of the agenda pack that the reference to Covid was no longer applicable and should have been deleted.  

RESOLVED that:-

(a)           the responses provided by management to the external auditors as set out in Appendix A be approved; and

(b)           the approach to accounting estimates in the financial statements as set out in Appendix B be approved.

Voting: Unanimous

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2020 to 31 March 2021.

A surplus of £18k has been achieved through a reduced need to carry out temporary borrowing due to high cash balances generated from funding paid in advance associated with the government’s response to the pandemic.

The report also sets out the Quarter One performance for 2021/22 which forecasts an underspend of £171k due to a lower requirement for temporary borrowing.

Further to the standard update the reports seeks approval to a minor adjustment to the Councils minimum revenue provision policy as well as seeking endorsement to increase our borrowing head room in line with the proposal set out in the financial strategy supporting the proposed 2022/23 budget as endorsed by Cabinet.

Matt Filmer, Acting Assistant Chief Financial Officer presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

The Committee was advised that it was a requirement under the Chartered Institute of Public Finance and Accountancy (CIPFA) Treasury Management Code of Practice that regular monitoring of the Treasury Management function was reported to Members.

Council was required to approve any changes to the prudential indicators based on a recommendation from the Audit & Governance Committee.

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2020 to 31 March 2021.

A surplus of £18k had been achieved through a reduced need to carry out temporary borrowing due to high cash balances generated from funding paid in advance associated with the Government’s response to the pandemic.

The report also set out the Quarter 1 performance for 2021/22 which forecasts an underspend of £171k due to a lower requirement for temporary borrowing.

Members were informed that further to the standard update the report sought approval to a minor adjustment to the Council’s minimum revenue provision policy as well as seeking endorsement to increase the Council’s borrowing head room in line with the proposal set out in the financial strategy supporting the proposed 2022/23 budget as endorsed by Cabinet.

The Acting Assistant Chief Financial Officer reported on the latest economic position.  He reported that interest rates remain historically low at 0.1% with the Council’s Treasury Management consultants not expecting an interest rate increase until late 2023.  The Committee was advised that inflation was the big topic in terms of the global economies and potential risks.  The Acting Assistant Chief Financial Officer reported that inflation as at the end of June was 2.5% with the Bank of England’s target being 2%.  He explained that the inflation levels were causing a split between experts with some taking the view it related to the unlocking of Covid restrictions and the economy opening up with others viewing it as a more engrained inflation rate.  The Committee was advised that this created a risk in particular for Council services with costs increasing and it was possible that the Bank of England may increase interest rates sooner to control inflation. 

The Acting Assistant Chief Financial Officer reported on the treasury management outturn for 2021 as set out in the report. He explained that the underspend was mainly due to the Council having received significant cash balances in terms of Government support and equally where the Council was distributing business grants.  The Committee was informed that borrowing at the end of March 2021 was just over £194m and at year end investments were just over £56m. 

The Committee was updated on the performance for Quarter 1 2021/22 with an underspend of £171,000 which was due to significant Government support as referred to earlier in the meeting.  The Acting Assistant Chief Financial Officer reported on the level  ...  view the full minutes text for item 15.

This report updates councillors on the position of the council’s Corporate Risk Register. The main updates are as follows:

·        No new risks have been added to the council’s Corporate Risk Register during the quarter.

·        Corporate Risk CR8 – Inability to run an election/ referendum – has been de-escalated and it now returns to being a service risk.

Each of the risks have been reviewed including the Actions Completed and the Actions Proposed. 

Fiona Manton, Risk and Insurance Manager presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'C' to these Minutes in the Minute Book.

The report updated councillors on the position of the council’s Corporate Risk Register. The main updates were as follows:

·        No new risks had been added to the Council’s Corporate Risk Register during the quarter.

·        Corporate Risk CR8 - Inability to run an election/ referendum – had been de-escalated and it now returns to being a service risk.

·        Each of the risks had been reviewed including the Actions Completed and the Actions Proposed.

The Risk and Insurance Manager reported on the continuing need to update and reflect the impact the pandemic had on the activities of the Council.  She reported that a full and comprehensive review of the corporate risks took place in June in advance of the workshop held with the Committee and from that process key questions were asked of each risk lead determining if the risk was still current and whether the impacts of the pandemic were sufficiently considered in the context of each risk.  The Committee was informed that the risk register included in appendix 1 of the report included the updates undertaken at the June review.

The Risk and Insurance Manager referred to the changes in risks during Quarter 1 which were referenced in paragraphs 8-12 of the report.  She explained that routinely risks were reviewed with the Chief Executive every six weeks and interim updates prepared for consideration which provided assurance.  The next interim review was scheduled for early august.

The Committee’s attention was drawn to paragraph 16 of the report and the work undertaken on horizon scanning which included looking out for new legislation and changes to the environment in which the Council operates with advanced notice provided to Managers of relevant information.  In addition, the Risk and Insurance Manager reported that the team challenged risks at both a corporate and a service level to ensure that they were given due consideration.

Councillor Phipps referred to CR11- the ability of the Council to function and operate efficiently in the delivery of single services across the BCP Council area and asked if the groups of officers and members were in place to deliver high level delivery plans for the corporate strategy.  She also referred to the LGA Peer challenge plan for November 2021 and asked if this would involve all Councillors.  The Risk and Insurance Officer reported that she would take those questions away and circulate a response in writing to the Committee.

The Chairman referred to CR9 and asked for an update on this risk.  Nicola Webb, Assistant Chief Financial Officer reported this was a refresh of the risk.     She highlighted the key issues including the impact of Covid and the high needs budget.  The Committee was advised that the Government had legislated that the high needs budget was not part of the general fund and it was carried  ...  view the full minutes text for item 16.

The Chairman of the Constitution Review Working Group will provide a verbal update on the work of the Group following its meeting on 20 July 2021.

The Chairman of the Constitution Review Working Group provided the following update on the work of the Group following its meeting on 20 July 2021.

Review of the BCP Council Constitution

The Working Group received the final drafts of Part 2 Articles and Part 4 Procedure Rules of the Constitution which had been reviewed and updated with the support of external solicitors to reflect the suggestions submitted by Councillors and recommendations of the Working Group.

The Working Group agreed the drafts and requested that a representative from Weightmans attend the Audit and Governance Committee when the proposals were discussed in order to answer any questions which members of that Committee may have.

The Monitoring Officer had reported that work would now commence on a first draft of Part 3 Delegation of Functions.  As before, BCP officers would prepare a draft for review by Weightmans before bringing it to the Constitution Review Working Group by the end of August.

Environment Overview & Scrutiny Committee

The Working Group considered the proposal for the formation of an additional Overview & Scrutiny Committee to work on matters/council services pertaining to the environment. This committee would enable the O&S Board to retain its overarching role and maintain a strategic focus.

The possible scope of the new Environment O&S Committee was debated.

The Working Group agreed to support the establishment of a new Committee and requested a further report on the possible division of work between this committee and O&S Board to be discussed at a further meeting to which the Chairman and Vice-Chairman of the O&S Board be invited.

Parish Council Request for Notification

The Working Group considered a request for parish councillors to receive notification regarding matters affecting their parishes. The Working Group agreed to support the recommendations that Democratic Services:

·      Provide Parish Clerks with details of wards falling wholly or partially within their parish

·      Provide guidance on how to subscribe to notifications

·       Parish clerk to forward to parish councillors for self-registration

The Chairman indicated that five members present were on the Working Group. Therefore, this would be the first time that other Members of the Committee had received the update.  The Chairman in particular referred to the proposal relating to a new overview and scrutiny Committee and making sure the Chair and Vice-Chair of the Overview and Scrutiny Board had the opportunity to come to the Committee before any recommendations were progressed to full Council. He highlighted the need to ensure that the process for consideration of this issue was joined up and appropriate consultation had taken place.

Councillor Phipps asked if a written report would be submitted to the Audit and Governance Committee on the proposal for the new O&S Committee.  Councillor Williams confirmed that a written report would be submitted to the Committee. Councillor Phipps also sought clarification on the notification for Parish Councils and what had been requested.  The Deputy Head of Democratic Services outlined the issue raised which was as a result of a question to  ...  view the full minutes text for item 17.

An annual review and update of the Council’s Declaration of Interests, Gifts & Hospitality Policy took place in March 2021.

A recent Internal Audit review has been carried out on arrangements in place to ensure adequate staff awareness of the Declaration of Interests, Gifts & Hospitality Policy and to confirm declarations were being made as necessary. The review resulted in a ‘Reasonable’ assurance audit opinion and recommendations made to improve arrangements are being implemented.

There have been no internal or external identified instances, whistleblowing or reports by any other means where an undeclared interest has led to any disciplinary action or led to reputational damage.  

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'D' to these Minutes in the Minute Book.

The Head of Audit and Management Assurance reported on the annual review and update of the Council’s Declaration of Interests, Gifts & Hospitality Policy which took place in March 2021.

The Committee was advised that a recent Internal Audit review had been carried out on arrangements in place to ensure adequate staff awareness of the Declaration of Interests, Gifts & Hospitality Policy and to confirm declarations were being made as necessary. The review resulted in a ‘Reasonable’ assurance audit opinion and recommendations made to improve arrangements were being implemented.

There had been no internal or external identified instances, whistleblowing or reports by any other means where an undeclared interest had led to any disciplinary action or led to reputational damage.

The Head of Audit and Management Assurance reported on the level of declarations by senior officers and that there was still work to do on wider compliance but risks were much lower. He highlighted the opportunity to embed the policy into the organisation’s staff induction process for new staff as well as on-going awareness reminders for other staff.  In response to a question on the level of discretion officers should apply in determining if a declaration is required or not, the Head of Audit and Management Assurance reported that all officers should make relevant declarations in accordance with the agreed policy and the Nolan principles.

RESOLVED that the Audit & Governance Committee notes the annual review of the Register of Declarations of Outside Interests and Receipts of Gifts & Hospitality by Officers for 2020/21.

Voting: Unanimous

A new BCP RIPA Policy was introduced in April 2021.

RIPA training has been provided to assist with compliance with legislation and the BCP RIPA Policy.

BCP Council is in the process of drafting an Investigatory Powers Act 2016 (IPA) Policy for communications data acquisition and this will be presented to Audit & Governance Committee for approval in due course.

An inspection by the Investigatory Powers Commissioner’s Office (IPCO) on the use of investigatory powers has recently been carried out and the outcome will be brought back to this committee.

The Council has not made use of RIPA powers during the 2020/21 financial year.

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'E' to these Minutes in the Minute Book.

The Committee was reminded that new BCP RIPA Policy was introduced in April 2021. RIPA training had been provided to assist with compliance with legislation and the Policy.

Members were informed that the Council was in the process of drafting an Investigatory Powers Act 2016 (IPA) Policy for communications data acquisition and which would be presented to the Committee for approval in due course.

The Head of Audit and Management Assurance reported on a telephone-based inspection by the Investigatory Powers Commissioner’s Office (IPCO) on the use of investigatory powers which had recently been carried out.  He outlined the outcome from the inspection and that the Investigatory Powers Commissioner, Sir Brian Leveson had written to the Chief Executive on 13 July 2021 stating that the work done by officers represented “good progress and places BCP Council in a strong position, should the opportunity for covert surveillance present itself”. The letter also contained four helpful observations from the Inspector as to how the Council could further improve policies and procedures, which officers would implement during the coming months.

The Committee was informed that the Council had not made use of RIPA powers during the 2020/21 financial year.

Members raised a number of questions which included when the powers were used, if responsibilities were justified and if the policy was preventing the Council from enforcing when appropriate.  The Head of Audit and Management Assurance reported that the training undertaken as referenced in the report had put the Council in a good position and officers understood when RIPA was needed, and indeed where it was not.  He highlighted the need to protect human rights and that the use of the RIPA powers was a last resort with officers being clear about the boundaries.  A Councillor referred to the potential impact on consumer protection.  The Head of Audit and Management reported that he would ask the Director of Communities to provide a response for circulation to all members of the Committee.  A Councillor asked if Officers were satisfied that the process was transparent and that there were appropriate safeguards in place. The Head of Audit and Management Assurance referred to the training received in June which had emphasised those factors and officers were clear on the constraints, and the ‘tests’ that should be applied in approving RIPA authorisation. 

RESOLVED that Audit & Governance Committee note that the Council has not made use of powers under the Regulation of Investigatory Powers Act during the 2020/21 financial year.

Voting: Unanimous

It is the opinion of the Chief Internal Auditor that during the 2020/21 financial year:

·       arrangements were in place to ensure an adequate and effective framework of governance, risk management and control (internal control environment) and that where weaknesses were identified there was an appropriate action plan in place to address them;

·       the systems and internal control arrangements were effective and that agreed policies and regulations were complied with;

·       adequate arrangements were in place to deter and detect fraud;

·       there was an appropriate and effective risk management framework;

·       managers were aware of the importance of maintaining internal controls and accepted recommendations made by Internal Audit to improve controls;

·       the Council’s Internal Audit service was effective and compliant with all regulations and standards as required of a professional internal audit service; and that

·       the arrangements, in respect of the Chief Internal Auditor, were consistent with all of the five principles set out in the CIPFA publication “The Role of the Head of Internal Audit in Public Sector Organisations”.

·       Whilst the COVID19 pandemic had a significant impact on the work of Internal Audit a revised Audit Plan was approved by the Audit & Governance Committee in July 2020 which has been delivered and no ‘limitation of scope’ opinion needs to be issued.

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'F' to these Minutes in the Minute Book.

The Committee was advised that it was the opinion of the Chief Internal Auditor that during the 2020/21 financial year:

·       arrangements were in place to ensure an adequate and effective framework of governance, risk management and control (internal control environment) and that where weaknesses were identified there was an appropriate action plan in place to address them;

·       the systems and internal control arrangements were effective and that agreed policies and regulations were complied with;

·       adequate arrangements were in place to deter and detect fraud;

·       there was an appropriate and effective risk management framework;

·       managers were aware of the importance of maintaining internal controls and accepted recommendations made by Internal Audit to improve controls;

·       the Council’s Internal Audit service was effective and compliant with all regulations and standards as required of a professional internal audit service; and that

·       the arrangements, in respect of the Chief Internal Auditor, were consistent with all of the five principles set out in the CIPFA publication “The Role of the Head of Internal Audit in Public Sector Organisations”.

The Head of Audit and Management Assurance reported on the work that had been undertaken by the Internal Audit Team.  He reported that in the early stages of the pandemic the team was repurposed to deal with covid19 grants to local businesses which broadly took 6-8 weeks out of the Audit Plan.  The Plan was revised on 30 July 2020 and delivered so no ‘limitation of scope’ opinion needed to be issued.

The Head of Audit and Management Assurance took the opportunity to thank his internal audit team for their flexibility and pragmatic approach which had included working additional hours and further reported that only 7 working days were lost for the whole of 2020/21 financial year.  The Chairman, on behalf of the Committee, endorsed the above gratitude to the team for their focus during this period and more importantly for prioritising work.  He highlighted that it was a fine example of Local Government working at its best.

Members raised a number of questions including the reference to the ‘reasonable assurance’ and the associated definition.  The Head of Audit and Management Assurance explained that definitions can subtly change between Council internal Audit teams but in general terms the criteria was fairly standard, and the team was resourced to provide ‘reasonable assurance’. He explained that to provide ‘substantial assurance’ would require more time and additional resources.  Councillor Phipps felt that the above did not come across in the report.  The Chairman asked for further explanation on ‘reasonable assurance’ from the Head of Audit and Management Assurance in terms of his professional opinion.  The Head of Audit and Management Assurance reported from a professional perspective he had responsibilities to ensure that the audit opinion was based on risk based prioritised work designed to obtain  ...  view the full minutes text for item 20.

This report sets out the breaches and waivers of Financial Regulations (the Regulations) which have occurred during the 2020/21 financial year (see table in the report).

The low number of breaches compared to previous years indicate that there was generally a good level of understanding of the Regulations.

The Chief Finance Officer, or formally delegated representatives, agreed 116 waivers totalling £12.6M.

The higher number of waivers compared to 2019/20 is materially due to the impact of COVID19 and the requirement to either directly award or run procurement processes with a select list of suppliers to be able to deliver goods, services and work, for both revenue and capital projects at speed in response to the pandemic and the emerging issues it presented.  BCP Council has followed Government issued advice and guidance in making procurement decisions during 2020/21 related to COVID19.

The advice and guidance state that sufficient documentation needs to exist to justify decisions taken in all stages of the procurement procedure in case of future challenge. BCP Council maintains Procurement Decision Records (PDR’s) which satisfy this requirement.

Whilst full compliance can never be guaranteed and ‘under-reporting’ of breaches, in particular, is an inherent possibility, arrangements were in place to detect instances of non-compliance. 

An effective and transparent breaches and waiver governance process maximises the chances of the Council achieving value for money and complying with UK Procurement Legislation (Public Contract Regulations 2015 (PCR15)) principles when procuring goods, services or works under PCR15 thresholds.

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'G' to these Minutes in the Minute Book.

This report set out the breaches and waivers of the Financial Regulations which had occurred during the 2020/21 financial year.

The Head of Audit and Management Assurance reported that there were five breaches totalling £871K as detailed in the report.  He reported that the explanation as to why these breaches occurred was detailed in paragraphs 4 & 5 of the report.  The Committee was informed that the circumstances of the breach does not highlight any fundamental governance issues, such as lack of awareness of Financial Regulations, as it was an administrative oversight, failure to approve and sign off a waiver in good time, which had now been corrected. 

The Head of Audit and Management Assurance reported on the waivers explaining that there were 116 waivers totalling £12.6M. The Committee was informed that to put that in context the Council spends about £400m a year, with third party suppliers, so the waivers represented approximately 2.5% - 3% of annual spend.  The Head of Audit and Management Assurance referred to paragraphs 13 to 15 which explained the two generalised reasons why there were more waivers in 2020/21 compared to the previous year.  He highlighted the impact of Covid relating to urgency and the limited availability of suppliers. The second issue was the Council’s transformation agenda and waivers to extend contracts for incumbent suppliers to allow time for redesign and to align contracts for legacy Councils. The Head of Audit and Management Assurance provided more detail on the higher value waivers.

Councillor Brooke referred to the number of breaches which had reduced but the value of the breaches had increased significantly. The Head of Audit and Management Assurance reported that the five beaches were initially produced as waivers but were not signed off in a timely manner hence being reported as breaches.

The Chairman indicated that the points highlighted by Councillor Brooke were critical to the Committee and two of the five breaches were substantial amounts.  He suggested that what would be of concern to the Committee was what steps had been taken to ensure that such breaches do not occur certainly of this magnitude in the future and that it was not acceptable not to comply with the requirements of Financial Regulations.  The Chairman indicated to save the Head of Audit and Management Assurance the difficulty of dealing with such breaches he asked if guidance had been put in place for Children’s Services or any other service.  The Head of Audit and Management Assurance reported that he was content that the Corporate Director had put arrangements in place which he had reviewed and was satisfied that this particular breach could not happen again as a result of the actions taken.  He also confirmed that breaches were of the Council’s financial regulations not a breach of the law.  ...  view the full minutes text for item 21.

The Accounts and Audit Regulations 2015* require councils to produce an Annual Governance Statement (AGS) to accompany its Statement of Accounts.

This report seeks approval for the AGS for BCP Council.

The AGS concludes that BCP Council “has effective and fit-for-purpose governance arrangements in place in accordance with the governance framework”.

After considering all the sources of assurance (for governance arrangements), BCP Corporate Management Board identified that the following significant governance issues existed:

·       Governance of Children’s Social Services

·       Governance Arrangements with External Bodies

An action plan to address these significant governance issues has been produced and is being implemented. An update against the action plan will be brought to Audit & Governance Committee in January 2021.

*and as amended by the Accounts and Audit (Amendment) Regulations 2021

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'H' to these Minutes in the Minute Book.

The Committee was informed that the Accounts and Audit Regulations 2015* require councils to produce an Annual Governance Statement (AGS) to accompany its Statement of Accounts. This report sought approval for the AGS for BCP Council.  The Head of Audit and Management Assurance reported that the Statement of Accounts would not be approved for some time and therefore the AGS was being approved subject to any issues that may arise and Officers would report back to the Committee if there were any changes.

The AGS concluded that BCP Council “has effective and fit-for-purpose governance arrangements in place in accordance with the governance framework”.

After considering all the sources of assurance (for governance arrangements), BCP Corporate Management Board identified that the following significant governance issues existed:

·       Governance of Children’s Social Services

·       Governance Arrangements with External Bodies

An action plan to address these significant governance issues has been produced and was being implemented. An update against the action plan would be brought to Audit & Governance Committee in January 2022.

*and as amended by the Accounts and Audit (Amendment) Regulations 2021

The Head of Audit and Management Assurance reported that best practice guidance was issued annually to help Councils with their AGS production and this year the guidance suggested that Councils should specifically comment on how Covid 19 had impacted which was referenced on page 162 of the agenda pack .  In addition, the guidance also asked Councils to include how the Financial Management code was being implemented in 2022 which was included on page164 of the agenda pack.

RESOLVED that:-

(a)           the Annual Governance Statement 2020/21 for BCP Council is approved and the Leader and Chief Executive are asked to formally sign it.

(b)           the BCP action plan to address significant governance issues is approved and a progress update will be presented to Audit and Governance Committee in January 2022.

(c)           The Local Code of Governance, which is subject to evolution to reflect governance arrangements, is noted.

Voting: Unanimous

This report details progress made on delivery of the 2021/22 Audit Plan for the period April to June (inclusive) 2021.  The report highlights that:

·       Three audit assignments have been completed (two  ‘Reasonable’ and one ‘Partial’ audit opinions);

·       Sixteen audit assignments are in progress;

·       Implementation of audit recommendations is satisfactory;

A significant amount of work undertaken during the quarter related to completion of the 2020/21 Audit Plan. The ‘Chief Auditor’s Annual Report 2020/21’ contains the outcome of this work which is being reported separately to this committee

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'I' to these Minutes in the Minute Book.

This report details progress made on delivery of the 2021/22 Audit Plan for the period April to June (inclusive) 2021.  The report highlights that:

·       Three audit assignments had been completed (two ‘Reasonable’ and one ‘Partial’ audit opinions);

·       Sixteen audit assignments were in progress;

·       Implementation of audit recommendations was satisfactory;

A significant amount of work undertaken during the quarter related to completion of the 2020/21 Audit Plan. The ‘Chief Auditor’s Annual Report 2020/21’ contained the outcome of this work which had been reported separately to this committee.

The Head of Audit and Management Assurance reported that Quarter 1 was a busy period for internal audit.  He outlined the four significant areas of work which was finalising the previous year’s audit plan coverage which had been completed, starting the new audit plan for 2021/22, producing the Annual Governance Statement and finalising the work necessary to produce the Chief Internal Auditor’s report. 

The Committee was referred to paragraph 4 of the report which explained in more detail the Community Infrastructure Levy (CIL) ‘partial’ audit opinion which was issued and was one of the three audits that had been completed so far this year.  The Head of Audit and Management Assurance reported on the good progress being made with the plan for 2021/22 and the assurance work that the Government had required post payment for all Government grants allocated to businesses using specified Government toolkits.  He referred the Committee to paragraph 9 and 10 and reported that CIPFA had conducted their three-day validation of the internal audit function to confirm that the Council’s internal audit team complies with public sector internal audit standards.  The Head of Audit Management reported that the team conformed to the required standards but this needed to be ratified by the CIPFA quality assurance board so the Council had not yet received the results officially and it was expected that there would be four minor recommendations and four suggestions on ways the Council can improve its processes.

Councillors raised a number of questions which included the way in which the audit had highlighted weaknesses relating CIL.  Councillor Brooke reported as vice-chair of the Broadstone Neighbourhood Forum on his concerns about controls, monitoring and management of the funds. He welcomed the internal audit recommendations. The Head of Audit and Management Assurance was asked if he had sufficient resource to exercise his functions on CIL which was a fragmented structure which would obviously take additional resource.  The Head of Audit and Management Assurance reported that he was content that he had sufficient resources and that the team would be following up the recommendations in the way referred to earlier in the meeting.  He explained that there were elements of good practice in the CIL system but there were also weaknesses hence the partial assurance  ...  view the full minutes text for item 23.

The attached report at Appendix A sets out the work that the Council’s External Auditor, Grant Thornton, plan to undertake for the audit of the Council’s Statement of Accounts in respect of 2020/21.

The External Auditor plans to give an opinion on whether the accounts give a true and fair view and whether the Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

The attached report at Appendix B provides an update to Audit & Governance Committee on the External Auditor’s progress to date in delivering their responsibilities.

The report also includes a summary of emerging national issues and developments that may be relevant to the Council.

Peter Barber, Grant Thornton External Auditor, presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'J' to these Minutes in the Minute Book.

Mr Barber referred the Committee to page 195 of the agenda pack which set out the work that the Council’s External Auditor, Grant Thornton, plan to undertake for the audit of the Council’s Statement of Accounts in respect of 2020/21 and the progress detailed on page 225. He referred to the Audit Plan and reminded the Committee of the external auditor’s responsibilities which were to provide an opinion on the Council’s financial statements and to issue a value for money conclusion.  He referred to the timing of the plan which had been delayed due to the time needed to complete the previous years audit. The Committee was advised that the approach to issuing the opinion and the VFM conclusion was summarised in the plan on page 200. 

Mr Barber reported on the opinion and explained that when the financial statements were signed off for 2021 later in the year, he would work to a materiality level that invariably within audit was based on a percentage of gross spend. The Committee was informed that the external auditor had opted for 1.4% of the Council’s spend for the year which at the planning stage equated to £11.56m for the Group and £11.5m for the Council.  Mr Barber explained the implications of this approach in particular the enhanced audit procedures for entries that exceeded £11.5m. The Committee was advised of entries of heightened risk that would be subject to more detailed testing as detailed in the report.  Mr Barber explained that the plan included provision for the proposed work on the accounting estimates.

Mr Barber referred to the VFM approach which was based on the criteria set by the national audit office.  He explained that this year was the first year of a new approach with three new criteria namely governance, economy, efficiency and effectiveness and financial resilience.  The Committee was advised that there were a number of risks that had been identified that the external auditors would focus on which were detailed at the bottom of page 200.  Mr Barber highlighted that they would be commenting on arrangements, identifying good practice and sharing best practice from elsewhere and where appropriate making recommendations and identifying areas for improvement and where appropriate issue key recommendations.  Mr Barber reported that if necessary, the auditors can issue statutory recommendations that require a formal response from the Council. He commented on the Council’s transformation programme which would also be considered and a focus on key partners and how the Council was working with subsidiaries to deliver appropriate services and proportionate governance.  The Committee was advised of the proposed timelines for the work that Mr Barber had set out, fees and the proposed increases in particular relating to the scale fee which reflected the additional work that had been undertaken last year and  ...  view the full minutes text for item 24.

This report sets out the reports to be received by the Audit & Governance Committee for the 2021/22 municipal year.

The Committee considered a report a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'K' to these Minutes in the Minute Book.

This report sets out the reports to be received by the Audit & Governance Committee for the 2021/22 municipal year.

The Chairman referred to the next meeting on 9 September 2021.  He explained that he had introduced additional meetings to deal with specific business that the Committee felt was pertinent to its role and remit and was timely as far as the Council was concerned with this work coming from suggestions from Members of the Committee which were governance issues that need to be looked at. He explained that the item for the next meeting was a review of the BH Live Contractual and Governance arrangements.  The Chairman referred to a meeting that both he and the Vice-Chairman were due to attend the following day relating to the report for the September meeting to ensure that all the governance issues were addressed in the report. 

The Head of Audit and Management Assurance reported on the detail in the plan and in particular the statement of accounts for 2021 which may slip to the meeting on 2 December 2021. He reported that the RIPA policy would be added to the evolution list so would come before the Committee in March 2022. The Head of Audit and Management Assurance reported that there had been a request following the meeting in June 2021 on the review of parks governance for the Monitoring Officer to come back to the Committee with a report on governance arrangements in more detail .  He reported that currently the internal audit team and the Legal team were doing the preparation work for the report and it was now necessary to agree the proposed meeting when the report would be considered by the Committee.

RESOLVED that the Audit & Governance Committee approves the forward plan set out at Appendix A subject to the comments made above and the item on parks governance being added to the Forward Plan for the meeting on 28 October 2021.

Voting: Agreed
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