Agenda and minutes

Corporate Governance & Audit Committee
Thursday 29 June 2017 9.30 am

Venue: Committee Room 2, East Pallant House

Contact: Mrs Bambi Jones on 01243 534685  Email:  bjones@chichester.gov.uk

Items
No. Item

126.

Chairman's Announcements

Any apologies for absence that have been received will be noted at this point.

 

Minutes:

The Chairman welcomed all to the meeting. She wished to welcome the two new members of the committee – Mr Jonathan Brown and Mr Peter Wilding. Mr Wilding had given his apologies for this meeting.

 

127.

Approval of Minutes pdf icon PDF 94 KB

The committee is requested to approve the minutes of its ordinary meeting on 30 March 2017.

Minutes:

The minutes of the meeting held on 30 March 2017 were agreed as a correct record subject to the following amendment:

 

·       Minute 122, final bullet point – replace ‘ManhoodPeninsular’ with ‘Manhood Peninsula’

 

128.

Urgent items

The chairman will announce any urgent items that due to special circumstances are to be dealt with under the Late Items agenda item.

 

Minutes:

There were no urgent items for consideration at this meeting.

 

129.

Declarations of Interest

These are to be made by members of the Corporate Governance and Audit Committee or other Chichester District Council members present in respect of matters on the agenda for this meeting.

 

Minutes:

No declarations of interest were recorded.

130.

Public Question Time

The procedure for submitting public questions in writing by no later than 12:00pm the day before the meetingis available here or from the Democratic Services Officer (whose contact details appear on the front page of this agenda).

Minutes:

No public questions had been received.

 

131.

Audit and Certification Fees 2017-18 - Ernst & Young LLP (EY) pdf icon PDF 34 KB

To review the proposed audit and certification work that Ernst & Young LLP proposes to undertake in 2017-18 and the fees for this work.

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mr Young (Ernst & Young LLP) presented the report. Mrs Belenger also responded to questions from members.

 

Mr Young advised that Public Sector Audit Appointments Ltd (PSAA) were still busy with the retendering exercise therefore the 2017-18 indicative fee had not yet been released however the 2016-17 fee should be used as an indication. EY had been awarded Lot 2 in the  tendering exercise by PSAA. Auditors would be appointed for a period of five years by PSAA after any necessary consultation with individual authorities, by 31 December 2017 at the latest. .

 

The committee made the following comments and received answers to questions as follows:

 

·             If the PSAA decides to rotate auditors it may be that EY will not be our auditors going forward.

·             An increase in the inflation rate would not be something which would trigger a fee increase.

 

RESOLVED

 

That the Ernst & Young LLP Audit and Certification Fees 2017-18 be noted.

 

132.

Audit Progress Report 2016-17 - Ernst & Young LLP

To receive an oral update on progress against the Audit Plan 2016-17.

Minutes:

Mr Young gave an oral update on the progress of the 2016-17 audit.

 

He advised that everything was on track; the early testing and controls testing had been completed and there was nothing of significance to report to the committee. Plans were in place for the grant certification testing – the housing benefit claim had progressed well with testing carried out in April. The statutory accounts and audit results report would be reported to the committee in September with the grants certification report later in the year.

 

133.

Corporate Debt Recovery Policy and Write-Off Policy pdf icon PDF 59 KB

To consider the updated Corporate Debt Recovery Policy and new Write-off Policy and recommend them to Cabinet for approval.

Additional documents:

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mrs Belenger introduced the report, drawing members’ attention to one of the actions from the Estates report at the last meeting which was to develop a Write-off Policy hence this report which included an amended Corporate Debt Recovery Policy. This was a coordinated approach to dealing with those who had debts with the Council, specifically those who had multiple debts. This debt recovery policy had been updated and the Communities team had been consulted for their views on financial inclusion and to incorporate a definition of a ‘vulnerable person’. The policy contained minor procedural changes and governance arrangements but no changes of a financial management nature.

 

The Constitution sets out the delegation to the Head of Finance & Governance (Section 151 officer) to write off any debts considered to be irrecoverable. The write off policy was setting out a scheme of delegation agreed by the Head of Finance & Governance which allows specific officers to write off smaller irrecoverable debts. The Write-off Policy sets out what determines a justifiable reason to write off an irrecoverable debt and the procedure to manage this process.

 

The Corporate Debt Recovery Policy with track changes was available to those who wanted to refer to it.

 

Corporate debt Policy

·         Some members thought that there was a lack of clarity as a policy document and suggested that the primary aim on page 10 could be made clearer by perhaps being set out under four headings e.g. promptness, fairness, facilitating process and a coordinated approach.

·         More information on financial inclusion would be included from colleagues when their work on this is finalised. A light touch approach had been carried out this time and further amendments would be included with the next review of the policy.

·         Page 11, third para under Arrangements for repayment of arrears - the ‘consequences with a view to minimising the effects’ section to be reworded slightly to read ‘the potential consequences of non-payment of the debt’.

·         Page 11 - the final bullet point should be split into two.

·         An annual report on write-offs is published to the modern.gov library.

·         Accountancy assess the adequacy of the bad debt provisions required for debts owed to the council, such as housing benefit overpayments during the budget cycle and final accounts processes. The top 10 debtors of the Council are reported to Mr Ward as S151 Officer and aged debts reports are looked at on a quarterly basis.

·         It is not down to the service to approve a write off as it is the Revenue  recovery teams view to recommend any write offs to Mr Ward after consultation with the Exchequer and Legal Services. Council Tax and Business Rates debts are considered by the Revenues Manager. All write-offs under the scheme of delegation will be reported to Mr Ward who will have oversight of the entire process.

·         Page 14 – amend ‘people who appear to have mental health issues…’ to ‘people who may have mental  ...  view the full minutes text for item 133.

134.

Treasury Management 2016-17 Outturn Report pdf icon PDF 154 KB

To consider the review of Treasury Management activity and performance for 2016-17 and to make any comments to Cabinet and to note the final Prudential Indicators for 2016-2017 to 2021-2022 as detailed in appendix 1 to the report.  

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mr Catlow presented the report.

 

The committee made the following comments and received answers to questions as follows:

 

·         There is a lot of uncertainty over Brexit and we will be guided by our treasury management consultants. We will be in a depressed interest rate market for the foreseeable future.

·         An explanation of traffic light system was given. Request was made to include this clarification in future reporting.

·         The Investment Protocol approved by the Council gives priority to investments within the district area however opportunities to acquire properties elsewhere are not excluded. Investments in estates are considered by estates officers and opportunities tended to be concentrated in an area due to demographics and/or business.

·         Capital expenditure is £1.6m less than the estimate and described as ‘variations and underspends’ including slippage of some schemes.

 

RESOLVED

 

That the final Prudential Indicators for 2016-17 to 2021-22 as detailed in appendix 1 to the report be noted.

 

RECOMMEND TO CABINET

 

That the 2016-17 Treasury Management Outturn Report be approved.

 

135.

S106 and Community Infrastructure Levy (CIL) Annual Monitoring Report pdf icon PDF 80 KB

To consider an annual report setting out new agreements signed, income received and monies spent for the previous financial year including an update on non-financial obligations and information on those S106 agreements due to expire within two years.

 

Additional documents:

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mrs Dower presented the report. Mr Davies and Ms Munns (WSCC) were available to answer questions. Mr S Oakley (district council member) was permitted by the Chairman to ask a number of questions.

 

Mrs Dower reminded members that this was the full S106 annual report and that the committee also received a report in November each year on those S106 agreements coming up to their target spend date.  Reports were also produced by ward in March and September each year for members to access on the Council’s intranet.

 

The number of S106 agreements produced over the last year had been scaled back as the new CIL regime was introduced. New this year was the CIL monitoring report, which would be included with the authority’s monitoring report published in December each year.

 

The committee made the following comments and received answers to questions as follows:

 

·         Land rear of Premier Business Park – this is in relation to a recreation disturbance payment paid at the outset under a unilateral undertaking (which is the route most developers choose). If the application is refused then the money is returned to the developer.

·         Request to show greater transparency in what has been achieved from S106 and CIL payments. Members were reminded that the role of this committee was to review governance and ensure processes were adequate to ensure that this procedure ran smoothly. The ward reports gave more detail on the outcomes achieved.

·         Members were concerned that their parish councils appeared not to have knowledge of the S106/CIL processes. It was suggested that this should be picked up through the biannual parish council meetings arranged by the authority. Forums are held in the local areas – a request for an agenda item will be passed to relevant officers running these forums.

·         There was concern regarding communication by the South Downs National Park (SDNP) to its parishes and the district councils regarding S106/CIL arrangements. Members were advised that the Overview and Scrutiny Committee had made a recommendation to the SDNP at its last meeting regarding the development of a Communications Protocol. Officers undertook to add a sentence under the background section of the covering report regarding the difference between the South Downs National Park and the Council’s administration of S106/CIL agreements.

·         It was suggested that any concerns were passed to Mr M Dunn, the authority’s representative on the SDNPA.

·         The non-financial obligations report was considered too lengthy. It would be useful if specific points could be highlighted in the body of the covering report e.g. where developers were unwilling to deliver their obligations.

·         Concern that once planning permission was granted officers were deciding how the money was spent in the S106 agreement without consulting with the local community. An example was the Shopwyke Lakes scheme where road junctions had not been included in the S106 agreement. 

·         Concern by members regarding the lack of transparency of decision making regarding how and why S106/CIL  ...  view the full minutes text for item 135.

136.

Corporate Health & Safety and Business Continuity Management pdf icon PDF 88 KB

To consider and note the Council’s arrangements in place for monitoring and controlling the risks associated with health and safety and business continuity matters.

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mr Townsend presented the report.

 

The committee made the following comments and received answers to questions as follows:

 

·         This data covers roughly 600 members of staff and casuals.

·         Relatively few accidents are caused by slips and trips on highways, pavements, potholes etc. taking into account the work by the CCS operatives.

·         Request to declare the cost of any litigation against us to show the link with the investment we are making. The authority declares to its insurer certain measures to aid risk management or where the business is changing e.g. CCTV on refuse lorries, the Safetywatch Scheme etc. in order that lower insurance costs could  be negotiated where risks are being better controlled.

·         Asbestos awareness training is delivered to certain officers as there may be a risk to them in the roles they undertake.

·         As part of business continuity arrangements an email continuity system has been developed to allow staff and members to access their emails in the event of a break of service.

 

RESOLVED

 

That the Council’s arrangements in place for monitoring and controlling the risks associated with health and safety and business continuity matters be noted.

 

137.

Internal Audit Reports and Progress against the Audit Plan pdf icon PDF 63 KB

To consider the two audit reports and to make any comments and to note progress against the audit plan.

Additional documents:

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mr James presented the report. Mrs Shipway attended to answer questions.

 

Mr James advised that the action marked ‘significant’ in the Key Financial Systems audit report for 2016-17, related to duplicate invoices being entered onto the creditors system and subsequently paid twice. Mrs Shipway advised that this had been an issue since the introduction of the Civica financial system and it was previously agreed that a report of potential duplicate invoices be run and reviewed monthly by the Exchequer Manager, thus mitigating the risk of duplicate payments. However, audit found that there were gaps in those reviews and they were not taking place on a regular basis. Mrs Belenger confirmed there was a known weakness in how duplicate purchase orders were dealt with which had led to duplicate payments. A Civica dashboard was being developed to assist financial staff and managers in order to stop the retrospective raising of purchase orders and that a new module for dealing with electronic invoices was being considered as the volume was increasing.

 

Mr James updated members on the progress of the audit plan for 2017-18 advising that a report on fraud would be brought to the next meeting of this committee.

 

As Mr James was not present at the new members’ induction session he gave an invitation to the two new members to contact him if they would like to visit the Internal Audit team and observe how the section operates. This invitation was then opened up to all members of the committee.

 

Mr James presented the report. Mrs Shipway attended to answer questions.

 

RESOLVED

 

1)          That the Contracts Management and Key Financial Systems audits be noted.

2)          That progress against the 2017-18 audit plan be noted.

 

138.

Appointments to Strategic Risk Group

The committee is requested to consider and confirm the committee’s three representatives on the Strategic Risk Group for the 2017-18 year. Current members are Mrs T Tull, Mr G Barrett and Mr G Hicks.

Minutes:

The current members of the committee on the Strategic Risk Group confirmed that they were happy to continue serving on this group.

 

RESOLVED

 

That Mrs T Tull, Mr G Barrett and Mr G Hicks continue as members of the Strategic Risk Group.

 

139.

Late items

The committee will consider any late items as follows:

a)    Items added to the agenda papers and made available for public inspection

b)    Items that the chairman has agreed should be taken as a matter of urgency by reason of special circumstances to be reported at the meeting

Minutes:

There were no late items.

 

140.

Exclusion of the Press and Public

The Committee is asked to consider in respect of the following item(s) whether the public, including the press, should be excluded from the meeting on the grounds of exemption under Parts I to 7 of Schedule 12A of the Local Government Act 1972, as indicated against the item and because, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information. The reports dealt with under this part of the agenda are attached for members of the Corporate Governance & Audit Committee and senior officers only (salmon paper).

Minutes:

RESOLVED

 

That the public, including the press, be excluded from the meeting for the following items on the grounds that it is likely that there would be a disclosure to the public of ‘exempt information’ of the description specified in Paragraph 5 (Information in respect of which a claim or legal professional privilege could be maintained in legal proceedings) of Part I of Schedule 12A to the Local Government Act 1972 and because, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.

 

141.

Potential liabilities of the Council

To consider this annual report which provides information regarding any potential liabilities of the Council in relation to outstanding litigation.

Minutes:

The committee considered the report in the agenda (copy attached to the official minutes).

 

Mr Bennett (Legal and Democratic Services Manager and the Council’s Monitoring Officer) presented the report.

 

Mr Bennett undertook to respond to members with the total amount involved  in the claim against Coinco International PLC.

 

RESOLVED

 

That the potential liabilities of the Council be noted.