Agenda and draft minutes

To receive any apologies for absence from Councillors.

Apologies were received from Cllr M Tarling.

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.

Notification was received that Cllr E Harman was substituting for Cllr M Tarling for this meeting.

Cllr M Andrews in the chair welcomed Cllr J Butt as a newly appointed member of the BCP Audit and Governance Committee.

To elect a chair of the Audit and Governance Committee for the Municipal Year 2025/26.

Cllr M Andrews presided over this item. Nominations were received and seconded for Cllr E Connolly and Cllr J Beesley to be appointed Chair. Both nominees addressed the Committee to give reasons why they should be elected Chair. Following a secret ballot it was:

RESOLVED that Cllr E Connolly be elected Chair of the Committee for the 2025/26 municipal year.

Voting: 6 in favour of Cllr E Connolly and 3 in favour of Cllr J Beesley.

The Chair thanked Cllr M Andrews for his work as the previous chair. She thanked members for their support and explained how she intended to approach the role.

A committee member was advised to direct a query on the secret ballot procedure through the Constitution Review Working Group.

To elect a vice chair of the Audit and Governance Committee for the Municipal Year 2025/26.

A nomination was received and seconded for Cllr M Andrews to be appointed Vice Chair. There being no further nominations it was:

RESOLVED that Cllr M Andrews be elected Vice Chair of the Committee for the 2025/25 municipal year

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.

In accordance with his previous declarations, in relation to Agenda Item 10 Cllr M Andrews reported for transparency that he was guarantor to his daughter’s tenancy for a house near Carters Quay.

To confirm and sign as a correct record the minutes of the meeting held on 20 March 2025.

RESOLVED that the minutes of the meeting held on 20 March 2025 were confirmed as an accurate record for the Chair to sign.

Voting: For – 7, Against – 0, Abstain – 2 

To receive any public questions, statements or petitions submitted in accordance with the Constitution. Further information on the requirements for submitting these 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 public questions is midday on Thursday 22 May 2025 [midday 3 clear working days before the meeting].

The deadline for the submission of a statement is midday on Wednesday 28 May 2025 [midday the working day before the meeting].

The deadline for the submission of a petition is Wednesday 14 May 2025 [10 working days before the meeting].

The following public issues were received:

Public Questions:

Agenda item 9 – BCP FuturePlaces Investigation scope

Question from Alex McKinstry:

Regarding Item 9 tonight, "BCP FuturePlaces investigation scope" - page 75, paragraph7, the fourth bullet point:

Some committee members have said they have external sources of information that they believe will be essential to the investigation. Committee members are invited to send/give the investigator any evidence they have ..." (Several provisos then follow.)

Does this invitation extend to councillors not on this committee, former councillors, Council officers, former Council officers, and former FuturePlaces employees? Can you also confirm whether anyone involved in FuturePlaces signed any kind of non-disclosure agreement, which may of course prohibit / inhibit those persons from reaching out?

Response:

If an individual has external sources of information relevant to the agreed scope of the investigation then they are able to send the evidence to the investigator.  From an employment law perspective, non-disclosure agreements normally contain confidentiality clauses which restrict any party from raising awareness to the existence of such an agreement and or the terms contained therein.   

Agenda Item 10  – Carters Quay Report Update

Question from Alex McKinstry:

Regarding the Carter's Quay update: have the investigators looked at an email (among the online planning records) sent from Inland Homes PLC to a planning officer on 24 August 2021 at 1333 hrs? This describes an upcoming meeting with a senior Council officer "about ensuring we are all on track for implementing in November - as the agreement it will be built for BCP has now been confirmed." The email is striking because at that point, 24 August, the Carter's Quay proposals hadn't been approved by Cabinet (which was on 1 September); nor full Council, which was three weeks away. If this matter has been investigated, what was the basis for that email and do any records of a confirmatory meeting, conducted on or around 24 August 2021, survive? If this matter has not been investigated, could it be inquired into.

Response:

Audit & Governance committee has indicated that a future investigation may be necessary, but the exact coverage and scope will be somewhat dependant on the outcome of the on-going administration of Inland Homes. The email was from a third party and so we have not established why the e-mail was drafted in those terms. Separately, the planning case officer followed due process in accordance with the statutory requirements for planning applications. Cabinet approved the proposal on 1 September 2021 and contracts were entered into subsequently in November.  

 Public Statements:

Agenda Item 8  – External Auditor - Audit Plan 2024/25

Statement 1 from Philip Gatrell

2023/24 OFFICER’S LOSS OF OFFICE COMPENSATION £37,500 -

“SPECIAL SEVERANCE PAYMENTS” GOVERNMENT GUIDANCE

The guidance emphasises accountability to taxpayers by limiting excessive exit payments to local authority officers.

“EX13” on Financial Regulations 5-54 defines guidance designated approvers and three payment bands.

On that basis the auditor contends there is no ultra vires element within the Compensation and no remedial action is required.  ...  view the full minutes text for item 7.

The attached report at Appendix A sets out the work that the Council’s External Auditor, Grant Thornton, plans to undertake for the audit of the Council’s Statement of Accounts in respect of 2024/25.

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.

Peter Barber, Barrie Morris and Katie Whybray, representing Grant Thornton, the Council’s External Auditor, 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.

The External Auditor team provided a brief update on the 2023/24 position and responded to questions, with the following points noted:

• The outstanding objection had been concluded. All concerns raised in the objection had been considered, the payment referenced was not ultra vires and no further action was required.
• The closure of the audit remained uncertified because the National Audit Office (NAO) had yet to complete its work on the Council’s Whole of Government Accounts. This was a national issue affecting all councils not just BCP. The risk was confirmed as minimal.
• The uplift had increased the audit fee to £493,539. The delay in certifying the audit’s closure would not adjust the fee further.
• The audit fee was driven by a scale fee set annually by the Public Sector Audit Appointments (PSAA). Any variation was subject to challenge by the PSAA and the Council. BCP Council’s fee was considered appropriate for the size and complexity of its accounts. Fee comparison data was publicly available at PSAA Auditor Directory 2024 to 2025
• It was confirmed that FuturePlaces was referenced in the Value for Money (VFM) conclusions which had found that the Council’s governance arrangements as a whole were now effective.

The Committee was advised of the work planned in undertaking the audit of the Council’s Statement of Accounts 2024/25, as detailed in the Appendix 1. The Audit Plan set out key developments impacting the audit approach, identified risks (including International Financial Reporting Standards (IFRS) 16), group audit, the IT audit strategy and value for money arrangements. Details of the fee estimate were also included.

The External Auditor team and officers responded to questions, with the following points noted:

• On VFM arrangements, it was confirmed that prior year recommendations were checked to see if they had been addressed
• The Council was in a better starting position for the 2024/25 audit than others and in the next few years the level of assurance should increase to a point of giving an unmodified opinion on the accounts.
• The Chief Financial Officer agreed to confirm how the audit fee appeared in the 2025/26 budget compared to the proposed fee.
• The procedures for considering and rebutting the risk of fraud in revenue and expenditure cycles were explained
• A lower materiality figure was specified for senior officer remuneration disclosures but not for other areas
• Risks relating to national/global events were considered to some extent, however the main focus was on risks which had a direct impact on the Council’s financial statements and VFM arrangements
• The same Grant Thornton team now audited the accounts for Dorset County Pension Fund (DCPF), meaning there would be more awareness of the progress of DCPF’s audit
• An assessment of Barnett Waddington’s approach as actuary including an evaluation of  ...  view the full minutes text for item 8.

This report details the proposed scope of an Internal Audit led investigation into the arrangements in place for the creation, operational running and closure of BCP FuturePlaces Limited.

The scope takes into account what was resolved at the last A&G committee (20 March 2025). At the conclusion of this investigation there may still be gaps in understanding, and the committee may or may not decide that further investigation through other means is required.

The Chair introduced this item and drew attention to the use of language when referring to the independence of the committee and its investigations and the HAMA’s role in reporting to members objectively and independently.

The Head of Audit and Management Assurance (HAMA) 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 report set out the proposed scope of an investigation into the arrangements in place for the creation, operational running and closure of BCP FuturePlaces Limited. The scope took into account what was resolved at the last meeting on 20 March 2025. It was noted that at the conclusion of the internal audit led investigation there could still be gaps in understanding and the Committee could decide that further investigation through other means was required.

The HAMA assured the committee that the more detailed ‘sub questions’ submitted by members in relation to the scope would be included in an appendix which would explain where they were referenced in the report. He confirmed that external sources of information would be considered if relevant to the agreed scope. The interim report would enable the committee to receive input from the Chief Executive before his retirement. The Committee was also reminded of the procedures in place should any attempt be made to influence the HAMA in carrying out his role.

In response to questions the HAMA signposted members to various sections of the scope where the points they raised were covered. It was noted that information provided in the March 2025 committee report could answer some of the detailed sub questions, however the HAMA’s report would be able to consolidate this information in one place. He confirmed that additional points could be considered throughout the reporting process.

A councillor not on the committee asked that Cabinet be requested to draw up costings for an external investigation. This was not intended to question the independence of Internal Audit but would appear more independent to the public. A committee member spoke in support of this and felt that it would allow members to make a more informed decision. Other members agreed that the committee should undertake its own investigation first, then, if necessary, refer any residual matters externally at a later date. It was noted that the committee had already discussed these issues at length at the last meeting and now needed to move on and agree the scope.

Members welcomed the opportunity for external evidence to be submitted. As two former FuturePlaces executive officers had submitted a public statement, it was considered appropriate to formally invite them to submit any evidence relevant to the scope of the investigation to the HAMA. It was suggested that clarity around non-disclosure agreements would be helpful and a closer look at governance and safeguards

Members considered the detailed points circulated in advance of the meeting and put forward by Cllr S Armstrong for inclusion in  ...  view the full minutes text for item 9.

At its meeting on 20 March 2025 the Committee requested a further update report to be provided at its next meeting on 29 May 2025.

A verbal update will be provided at the meeting.

The Committee had previously agreed to add to its forward plan an investigation into the Council’s governance and processes around regeneration projects with a focus on Carters Quay. In the meantime, Members had requested an update on Carters Quay for this meeting. The Chair advised that the following information had been received from the Director, Investment and Development:

“Following the meeting in March, the Council has reiterated its formal offer to the Administrator and instructed legal advisors to prepare a robust response given the lack of progress since last year. Cabinet and Council will be presented with an option report in August to agree a way forward. The Committee are reminded that the Council has a charge over the land which means the Administrator cannot sell the land without the Council’s agreement to release.”

The Committee was advised that the Director, Investment and Development, had offered to produce a timeline of key events as a recap for members.

Some members were concerned at the lack of progress in scoping the investigation they had asked for. A councillor not on the committee argued that the investigation was retrospective and should not affect whatever legal process was now underway. It was suggested that a report on the timeline of key events, setting out clearly ‘how we got to where we are’, could provide the committee with a better understanding and help inform members when scoping the investigation at a later date. As some of this information had already featured in previous reports including to the overview and scrutiny committee, the Chief Executive agreed that a report of this nature, focussing on governance and process, could be produced for the next meeting on 24 July meeting. This would enable members to ask questions before deciding when and how to scope an investigation.

It was also agreed to circulate by email the update provided by the Director, Investment and Development together with the advice previously provided by the Monitoring Officer on what the committee can/cannot undertake at the present time.

At the Audit & Governance Committee meeting on 20 March 2025, the approval of the 2025/26 Internal Audit Plan was deferred to the next meeting on 29 May 2025. The Committee requested clarification on nine points derived from the Institute of Internal Auditor’s (IIA) Supplementary Guidance (non-mandatory) document “Developing a Risk Based Internal Audit Plan”.

This report responds to each point and clarifies the process followed by the BCP Internal Audit Function in determining its Internal Audit Plan and demonstrating conformance to the IIA’s mandatory requirements of the International Professional Practices Framework 2024 (IPPF).

The Chief Internal Auditor is satisfied that the Internal Audit team comply with all the mandatory elements of the IPPF (including the Global Internal Audit Standards and relevant application notes) and previously verified by external assessment.

Internal Audit planning takes into account the non-mandatory guidance elements of the IPPF.

Ensuring the Committee is equipped with all relevant, sufficiently detailed, information, to enable them to meaningfully consider and agree the Plan has continually evolved over time and requires judgement on what level of detail is helpful to the Committee. As a trial, further information has been included in the Internal Audit – Audit Plan 20256/26 report which is being brought separately to this Committee.

The Audit 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.

At the meeting on 20 March 2025, the approval of the 2025/26 Internal Audit Plan was deferred to provide clarification on nine points raised at the meeting by one of the independent Persons and which derived from the Institute of Internal Auditor’s (IIA) Supplementary Guidance (non-mandatory) document “Developing a Risk Based Internal Audit Plan”. The report responded to each point and clarified the process followed in determining the Internal Audit Plan and demonstrating conformance to the IIA’s mandatory requirements of the International Professional Practices Framework 2024 (IPPF).

The Committee was assured that the Chief Internal Auditor was satisfied that the Internal Audit team complied with relevant mandatory audit standards in producing the Internal Audit Plan. Information provided to the Committee continued to evolve over time with the aim of providing a level of content which was helpful without being unnecessarily detailed. As a trial, additional information had been incorporated into the Internal Audit – Audit Plan 2025/26 report, including more detail on work planned in quarter one, and further details for the whole year subsequently circulated.

The Chair thanked the Head of Audit and Management Assurance (HAMA) for arranging a briefing session in preparation for this meeting to go through the responses with members in more detail. Members agreed this had been a very useful and accessible session. The Chair commented on Internal Audit’s risk based approach and members supported the suggestion of including a briefing at a non-core meeting on how Internal Audit achieved ‘comfort’ with its coverage. It was also intended to use the Committee’s Teams channel to provide more detailed information for those who wanted it.

One of the Independent Persons noted that one of the Council’s corporate risks, (CR27 – We may fail to adequately address concerns around environmental impacts) did not seem to feature in the 25/26 Audit Plan. The HAMA stated that it was difficult to cross reference and immediately respond to that comment in the meeting. He would take it away and provide a written response to be circulated to the whole committee and included in the minutes, as set out below:

“Corporate Risk 27 “We may fail to adequately address concerns around environmental impacts” is further described as “This risk has been created to capture emerging risks in relation to environmental impacts. The first risk to be included under this group is that of cliff instability and the risk will primarily reflect this initially. The risk will continue to develop to include further areas over the next several months.” This risk was added to the risk register in March 2025. A 2024/25/26 (cross-over year) audit of Flood and Coastal Erosion Risk Management (FCERM) is currently underway, of which the scope comprises FCERM Commercial Operations (including business cases, grant funding bids), Procurement Activity and Team Resilience (capacity/expertise). A draft report is  ...  view the full minutes text for item 11.

This report was originally brought to Audit & Governance Committee on 20 March 2025. Following queries raised at the Committee, a separate report has been brought to this Committee. The report below is an updated version of the March report.

To comply with the Global Internal Audit Standards (GIAS), and the Application Note / CIPFA’s Code of Practice for the Governance of Internal Audit in UK Local Government, this report outlines the BCP Assurance Framework and the Internal Audit Plan for 2025/26.

The final Internal Audit Plan for 2025/26 has been produced. Completion of the plan will enable the Head of Audit & Management Assurance to provide an annual conclusion on the Councils’ governance, risk management and control arrangements.

The allocated budget resource for 2025/26 is considered adequate to deliver the Internal Audit Charter and Audit Plan for 2025/26.

The Audit Manager 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.

This report was originally brought to Audit & Governance Committee on 10 March 2025. Following queries raised at the March meeting, a separate updated version of the report was now brought to this Committee as explained in the preceding agenda item.

Members noted that the final Internal Audit Plan for 2025/26 had been produced and that completion of the plan would enable the Head of Audit & Management Assurance to provide an annual conclusion on the Councils’ governance, risk management and control arrangements. The allocated budget resource for 2025/26 was considered adequate to deliver the Internal Audit Charter and Audit Plan for 2025/26.

In response to Independent Persons’ feedback, the Chair agreed to consider adjusting the order of agenda items for future meetings to bring forward internal audit reports when it was expedient to do.

RESOLVED that

(a)  the Internal Audit Plan 2025/26 including the detailed breakdown of quarter 1 audits be approved;

(b)  the 2025/26 budget for the Internal Audit service, which was approved by Council as part of the 2025/26 Council Budget setting and Medium Term Financial Plan update in February 2025, be noted

Voting: Unanimous