Agenda and draft minutes

Governance and Audit Committee
Wednesday, 27th September, 2017 7.00 pm

Venue: Council Chamber, Cecil Street, Margate, Kent

Contact: James Clapson 

Items
No. Item

1.

Apologies for Absence

2.

Declarations of Interest

    'To receive any declarations of interest.  Members are advised to consider the advice contained within the Declaration of Interest Form attached at the back of this Agenda.  If a Member declares an interest, they should complete that form and hand it to the Officer clerking the meeting and then take the prescribed course of action.'

     

    Minutes:

    There were no declarations of interest.

3.

Minutes of Previous Meeting pdf icon PDF 120 KB

4.

FINAL STATEMENT OF ACCOUNTS pdf icon PDF 161 KB

    Additional documents:

    Minutes:

    Mr Willis, Director of Corporate Resources and Section 151 Officer, introduced the report during which it was noted that the external auditor had very recently raised a concern regarding the valuation of some of the Council’s assets.  This issue would need to be resolved before the accounts could be signed off.  The statutory deadline for sign off of the accounts was the end of September.

     

    Mr Wells, Grant Thornton UK LLP (GT) provided Members with a brief summary of the External Audit Findings document which he used to provide an explanation of where the asset valuation concern originated from.

     

    During consideration of the item it was noted that

     

    ·  Some councils revalued all their investment property assets on an annual basis, however GT recognised that this approach could be prohibitively expensive for the Council.  The Council revalued 20% of its Investment property assets annually.

    ·  The valuation method of the Council’s assets had remained unchanged from previous years; however the method maybe reconsidered in future.

     

    Councillor Campbell asked the following questions under Council procedure rule 20.1.  Mr Prashar, Head of Financial Services responded to each question in turn (response shown in italics):

     

    1/ Page 8, Service Area. Why was there no comparison with previous years?

    The context of these paragraphs was to highlight financial management during the period 1 April 2016 to 31 March 2017, so it only compared the spend to the budget rather than to prior years spend.

     

    2/ Page 9, Financing. Why was there a marked difference between budget and actual figures?

    The actual figure included parish precepts of £1.146 million to reconcile with Note 10 to the core financial statements which would not be included in the TDC budget.

     

    3/ Page 10, Capital Programme 2017-21. Under the heading Construction, Replacements and Enhancements, and Housing Revenue Account (HRA) Schemes, why was there a marked difference between forecast for 2017/18 and the following years?

    There were large schemes to be delivered in 2017/18 such as:

    -HRA Schemes - New Build and Housing Intervention Programs.

    -Construction, Replacement & Enhancement – Dreamland, Vehicle Replacement and Dalby Square Project.

     

    4/ Page 18, Director of Operational Services. Expenditure had dropped from 2016, where were these savings made?

    The difference was a cumulative effect rather than savings. The HAVS provision set up for fines in 2015/16 and charged to operational services (£2 million), was credited back to the service in 2016/17 to be transferred to Risk Reserve to meet potential future liabilities around risk (£1.7 million).  This was a net movement of £3.7 million. In addition, costs related to Animal Exports (£1.8 million) reflected in 2015/16, no longer existed in 2016/17.

     

    5/ Page 19, Major Repairs Reserve. There was over £8 million in this fund. Was there a major building programme envisaged?

    The Major Repairs Reserve was utilised to manage the peaks and troughs of the HRA Capital Programme over the next 30 years.  A new stock condition survey had been undertaken by East Kent Housing which would determine the capital works required to maintain the  ...  view the full minutes text for item 4.

5.

THE EXTERNAL AUDIT FINDINGS FOR THANET DISTRICT COUNCIL - YEAR ENDING MARCH 2017 pdf icon PDF 538 KB

6.

Letter of Representation

7.

QUARTERLY INTERNAL AUDIT UPDATE REPORT pdf icon PDF 106 KB

    Additional documents:

    Minutes:

    Ms Parker, Head of East Kent Audit Partnership, introduced the report noting that there had been seven internal audit assignments completed since the last committee meeting; four achieved substantial assurance, one achieved reasonable assurance, and one achieved a split assurance which was partly limited. There was one assignment for which an assurance opinion was not required, and five follow-up reviews had taken place.

     

    During the introduction of the item, Ms Parker provided a brief comment regarding the follow-up to the street cleaning audit that was reported to the last meeting of the Committee. It was noted that EKAP had not previously conducted an audit of street cleaning and therefore did not have evidence to support the statement that the Council had most likely failed to achieve its corporate objective in this regard for the last 15 years. EKAP dealt with facts and evidence, and made conclusions based upon its own independent findings.  It was recognised that it had been poor judgment to simply quote a comment made by the Director of Operational Services from the 8 March meeting.

     

    Mr Willis responded to Ms Parker’s comment with the following points:

    ·  TDC worked well with EKAP and valued its independence.

    ·  The acknowledgment that the comments regarding street cleaning follow up had strayed beyond the audit was appreciated.

    ·  TDC officers would respond positivity to the street cleaning audit, and all other audits.  It was recognised that EKAP added value to delivery of corporate values and priorities.

     

    Councillor Campbell spoke under council procedure rule 20.1 to ask the following questions:

     

    1/ Should the summary of findings for EKHR – Payroll and Benefits in Kind, include details of the limited assurance achieved? 

    Ms Parker advised that there appeared to have been a typographical error, she offered to bring a corrected summary to the next meeting.

    (Post meeting note – Upon further investigation the summary of findings was found to be correct, details of the limited assurance were detailed in the summary for benefits in kind.)

     

    2/ What did PCI and DSS refer to in paragraph 3.3.a of the report, and why did this area continue to have a low assurance rating after follow up?

    Ms Parker advised that there was a requirement for ongoing improvement in relation to data security and card payment protection.  The report highlighted that the Council’s approach to address this was felt to be less resilient than that of the other East Kent Council’s.

    Mr Howes clarified that PCI-DDS stood for Payment Card Industry Data Security Standard

     

    During consideration of the item it was noted that:

    ·  A management response to the high priority audit recommendations in relation to contract standing orders remained outstanding as at mid June. Ms Parker explained that the committee could request that a statement from the relevant officer be brought to the next meeting.

    ·  Project management retained a limited assurance after the audit follow up, however the Director of Operational Services explained that a number of new practices had recently been introduced and it was expected that  ...  view the full minutes text for item 7.

8.

CORPORATE RISK REGISTER QUARTERLY UPDATE pdf icon PDF 175 KB

    Minutes:

    Mr Willis introduced the report and noted where updates had been made. 

     

    During consideration of the item its was noted that:

    ·  The level of risk in relation to the Dreamland operator had significantly reduced.

    ·  Risks around fire safety in tower blocks and corporate capacity in light of a corporate restructure were considered, however neither issue was felt to pose an adequate level of risk to feature in the corporate risk register.

    ·  The member development group was a cross party group which considered member training matters.

    ·  Health and safety remained on the risk register, however a new electronic document management system was expected to be fully rolled out across the Council over the next eight months.  This system would help to highlight if there were any gaps in health and safety practice.

     

    Members noted the report.

9.

THE ANNUAL GOVERNANCE STATEMENT 2016/17 pdf icon PDF 99 KB

10.

REVISED WHISTLEBLOWING CODE pdf icon PDF 95 KB

    Additional documents:

    Minutes:

    Mr Howes, introduced the revised Whistleblowing Code and noted that the proposed changes had been highlighted in paragraph 2.1 of the report.

     

    During consideration of the item it was noted that:

     

    ·  The contents page would be amended.

    ·  The document version history would restart as the document was significantly different from previous versions owing to changes in legislation.

    ·  It was expected that the Code would be reviewed annually.

     

    It was proposed by Councillor Hayton, seconded by Councillor Evans and Members agreed that the Committee approve the Whistleblowing Code.