Agenda and draft minutes

Venue: Council Chamber, Council Offices, Cecil Street, Margate, Kent. View directions

Contact: Charles Hungwe 

Link: This meeting will be live-streamed

Media

Items
No. Item

22.

Apologies for Absence

Minutes:

Apologies were received from the following members:

 

Councillor Farooki, substituted by Councillor Crittenden;

Councillor Pope, substituted by Councillor Driver;

Councillor Barlow;

Councillor Scott.

23.

Declarations of Interest pdf icon PDF 87 KB

  • View the background to item 23.

To receive any declarations of interest.  Members are advised to consider the advice contained within the Declaration of Interest advice attached to this Agenda.  If a Member declares an interest, they should complete the Declaration of Interest Form.

Minutes:

There were no declarations of interest.

24.

Minutes of Previous Meeting pdf icon PDF 104 KB

To approve the substantive individual minute items of Minutes of the inquorate Governance and Audit Committee meeting held on 04 November 2024, copy attached.

Minutes:

The minutes should be amended to reflect that apologies were received from Councillor Garner.

 

Councillor Packman proposed, Councillor Britcher seconded and members AGREED to approve the minutes as a correct record of the meeting held on 4 November 2024, subject to the above amendment.

25.

Quarterly Internal Audit Update Report pdf icon PDF 131 KB

Additional documents:

Minutes:

Simon Webb, Deputy Head of East Kent Audit Partnership introduced the report and made the following points:

 

·  This report was a summary of the internal audit activities since the last Governance & Audit Committee meeting;

·  Two new audits had been completed;

·  The Code of Conduct and Standards had been given substantial assurance;

·  Events management had been given limited assurance but it was hoped that this would become reasonable assurance in Quarter 4 and progress will be reported at the March 2025 committee meeting;

·  Follow up audits were usually conducted in between to check on progress. One follow had been done in the period under review and had recorded substantial assurance;

·  Fifty five percent of the Audit Plan that was agreed in March this year had been covered by June 2024. By November that figure had gone up to seventy four percent. The aim was to reach ninety five percent before end March 2025;

·  At the end of each audit a survey is conducted. The Audit Partnership team had received a hundred percent feedback on the customer satisfaction survey conducted by the team.

 

The committee noted the report.

26.

Corporate Risk Management - Quarterly Update pdf icon PDF 590 KB

Minutes:

Aimee Jackson, Risk and Insurance Manager introduced the report and made the following points:

 

·  The Council monitors and manages its Corporate Risks through the Corporate Risk Register. The contents of the report highlight the high-priority corporate risks and show the arrangements that are put in place to ensure these risks are monitored and managed appropriately;

·  The Council was dedicated to a proactive approach on Risk Management and asks all departments to cooperate on the Risk Strategy;

·  The strategy defines corporate risks as ‘those which could impact across the whole council’. Operational risks are identified from the ‘bottom up’, through service planning for the year ahead and through continuous review during the year;

·  Operational risks may be escalated and considered Corporate level risks, depending on the evaluation of the risk and through engagement with Senior Management and the Corporate Management Team;

·  This was alongside Risk Management training which was also offered and delivered to all service areas, sometimes on an individual basis or on a team meeting basis. This was so that the Risk Management Strategy could be kept relevant and current for all the service areas;

·  As there were such a diverse portfolio, this was incredibly important in order to give this committee a full oversight of the risks that the Council face;

·  On that theme, it was important to understand that keeping things relevant and current was of utmost importance as alluded to in our previous meeting;

·  Next year the Council would be invested in creating a digital risk management platform to centralise registers and  records and to streamline and develop risk management needs alongside reviewing the risk management strategy;

·  This would include the risk objectives and the risk scoring matrix with the view that a 5x5 matrix be adopted and Target risk would be introduced to the Risk Registers. It was felt that this would serve better to illuminate members on risk management and the commitment to the Risk Management strategy;

 

·  This report represented the position at the beginning of October 2024 and as such was a snapshot of where the risk and also the mitigations sat at that point in time, so please bear in mind that some of these risks may well have moved on since then;

·  Risks have to be assessed in respect of the combination of the likelihood of something happening, and the impact arising as a result;

·  At staff level, the corporate risk register was regularly considered by the Corporate Management Team (CMT) and of course the Governance & Audit Committee considered changes to the corporate risk register. A view can also be taken regarding the extent to which the risks should be tolerated;

·  All but one of the Corporate Risks had stayed static but Cyber Attack on page 39 had now been downgraded to a 12;

·  Given the significant focus and activity which had taken place to increase controls and mitigations since the last quarterly update, consideration was now being given to reduce the likelihood risk score from 4 (very likely) to 3  ...  view the full minutes text for item 26.

27.

Mid Year Review 2024/25: Treasury Management and Annual Investment Strategy pdf icon PDF 265 KB

Additional documents:

Minutes:

Matt Sanham, Head of Finance and Procurement introduced the report and made the following comments:

 

·  This report summarised treasury management activity and prudential / treasury indicators at the midpoint of 2024/25;

·  Part of the treasury management operation was to ensure that cash flow was adequately planned, with surplus monies being invested in low risk counterparties, providing adequate liquidity initially before considering optimising investment return;

·  The second main function of the treasury management service was the funding of the Council’s capital plans. These capital plans provided a guide to the borrowing needs of the Council, essentially the longer term cash flow planning to ensure the Council could meet its capital spending operations;

·  This management of longer term cash may involve arranging long or short term loans, or using longer term cash flow surpluses, and on occasion any debt previously drawn may be restructured to meet Council risk or cost objectives;

·  Officers can confirm that the approved limits within the Annual Investment Strategy were not breached during the first six months of 2024/25.

 

Councillor Davis proposed, Councillor Donaldson seconded and the committee recommended the report and annexes (including the prudential and treasury indicators that are shown and the proposed changes to the 2024/25 Treasury Management Strategy Statement) to Council for approval.

28.

Independent auditor's Report on the audit of the financial statements for 2022/23 - Draft Audit Opinion pdf icon PDF 97 KB

Report to follow

Additional documents:

Minutes:

Chris Blundell, Director of Corporate Services and S151 Officer introduced the report and made the following points:

 

·  The 2022/23 audit opinion was a disclaimer opinion and this was happening across the local government sector. This was caused by the backlog currently being experienced in the sector;

·  There were going to be a significant number of local authorities that were going to be issued with disclaimer opinions;

·  It was hoped that 2023/24 would produce a better audit opinion for the sector as the backlog eases;

·  The above comments were not a criticism of Grant Thornton but rather it was a situation currently obtaining in local government;

·  Legislation had been passed to manage this situation;

·  The text that was in the report from Grant Thornton was standard text;

·  The text was a little harsh. However it was worth noting that issuance of disclaimers would be happening to more local councils for the period under review;

·  Officers hoped that Thanet District Council would be in a different position for the 2023/24 audit;

·  The Head of Finance and Procurement and his team had worked on re-prioritising work together with Matt Dean and his team.

 

Matt Dean made the following points:

 

·  All of the officers had a role to explain the message;

·  The government guidance would help explain the situation;

·  The statutory recommendation was that the disclaimer wording had to be in the opinion;

·  The audit period 2023/24 would be challenging because the starting figures to be used would be from 2022/23;

·  Grant Thornton would not like disclaimers to run longer than they needed to.

 

Matt Dean made the following points:

 

·  Each of the key players had a role to play in explaining the message regarding the audit opinion for the period under review;

·  The government guidance helped explain the situation currently faced by the local government sector;

·  The statutory recommendation was that the wording on a disclaimer had to be in the opinion;

·  The 2023/24 audit period would also pose its own challenges because the starting figures would be from 2022/23;

·  There was very little way of 2022/23 not affecting accounts for 2023/24 because the latter uses closing balances from the former;

·  Rebuilding assurance would take time. Looking at in-year balances would help build the assurance levels;

·  The view was to move as far as possible with the 2023/24;

·  Leading up to February 2026, there would just be the 2024/25 set of accounts to focus on;

·  This would help come up with a normalized opinion, as there would be more time to do the accounts;

·  It was working over two different sets of accounting periods that was currently the challenge.

 

Members asked questions and made comments as follows:

 

·  The current audit situation in local authorities was not a good look for local government at a time when the public had low trust;

·  The committee wanted to understand from Grant Thornton and Section 151 Officer what it is that the Council would need to do as additional activities to get things right for the 2023/24  ...  view the full minutes text for item 28.

29.

Letter of Representation pdf icon PDF 92 KB

Report to follow

Additional documents:

Minutes:

Matt Sanham, Head of Finance and Procurement made the following comments:

 

·  In support of good governance, the Governance and Audit Committee must also consider the letter or representation on behalf of the council. The letter is provided at (Annex 1) in relation to Thanet District Council’s financial statements for the year ended 31 March 2023;

·  It is a requirement that this letter be received by the committee in order to be signed by the Chair;

·  As is the case with the majority of Local Government, we are playing catch up with regards to the publication and approval of financial statements. This report and supporting documents see us making progress towards establishing a clean slate with regards to production and reporting of the main statements.

 

Matt Sanham also said that most of the discussion had been covered under the discussion on the “Independent auditor's Report on the audit of the financial statements for 2022/23 - Draft Audit Opinion,” above.

 

The Governance and Audit Committee noted the letter of representation to Grant Thornton issued by the Director of Corporate Resources and Section 151 Officer.

30.

Short Form Audit Findings Report for 2022-23 pdf icon PDF 108 KB

Report to follow

Additional documents:

Minutes:

Matt Sanham made the following comments:

 

·  As was reported to the July meeting, the draft  Statement of Accounts for 2022-23 were now published, but due to the reasons set out in this report and the audit findings detailed in Grant Thornton’s letter, shown in Annex 2 it was necessary to agree a disclaimed position in relation to these as a full Audit has not been possible;

·  The government, working closely with partner organisations, has implemented measures because of a large backlog in relation to local government audits in England. One consequence was that many local bodies will receive modified or disclaimed audit opinions due to circumstances largely outside of their control and where these do not signify issues in their financial accounts. The document attached at Annex 1 explains the context for these opinions to help ensure that local bodies are not unfairly judged;

·  The government was clear that, where the backstop dates result in modified or disclaimed opinions, local bodies should not be unfairly judged. Auditing standards required auditors to clearly explain the basis of their opinion in their auditor’s report. They should distinguish between disclaimed or modified opinions caused by the backstop  date and  those caused by other factors such as weaknesses in financial reporting or specific material issues in the accounts. This explanation from the auditor should be included as part of the statement of accounts published by a local body on its website by the relevant backstop date;

·  Grant Thornton were currently working on a value for money audit for 2023/24.

 

Matt Sanham also said that most of the discussion had been covered under the discussion on the “Independent auditor's Report on the audit of the financial statements for 2022/23 - Draft Audit Opinion,” above.

 

The committee noted the Audit Findings for the 2022/23 Statement of Accounts.

31.

The Informing the Risk Assessment Document for 2023-24 pdf icon PDF 93 KB

Report to follow

Additional documents:

Minutes:

Matt Sanham introduced the report and made the following comments:

 

·  The purpose of this report is to contribute towards the effective two-way communication between Thanet District Council’s external auditors and Thanet District Council’s Audit Committee, as 'those charged with governance';

·  The report covers some important areas of the auditor risk assessment where we are required to make inquiries of the Audit Committee under auditing standards;

·  A representative from Grant  Thornton will present the Risk Assessment Report, which is included at Annex 1 to this report;

·  Providing this committee with the Risk Assessment forms part of the process of supporting the main Audit of the Accounts.

 

 

A member thanked the committee for the positive debate that had taken place at the meeting.

 

The committee received and noted the Informing the Risk Assessment document for the 2023/24 Statement of Accounts.

32.

Independent Auditors' Thanet District Council Audit Plan pdf icon PDF 92 KB

Report to follow

Additional documents:

Minutes:

Matt Sanham, Head of Finance and Procurement introduced the report and made the following comments:

 

·  The External Audit Plan 2023-24 has been developed by our appointed external auditor, Grant Thornton, and sets out the proposed external audit work and fee relating to the 2023-24 annual audit at Thanet;

·  A representative from Grant Thornton will present their interim Audit Findings Report, which is included at Annex 1, this plan has been pulled together following consultation with the Section 151 Officer and his deputy.

 

Matt Dean said that this was an audit plan which was not expected to change significantly.

 

The committee noted the external audit plan.