Agenda and minutes

There were no apologies for absence.

To approve the minutes from the Audit and Committee held on 18 September 2023.

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The minutes of the Audit Committee held on 18 September 2023 were agreed as a correct record and signed by the Chair.

Please indicate if there are any interests which should be declared.  A declaration of an interest should indicate the nature of the interest (if not already declared on the Register of Interests) and the agenda item to which it relates.  If a disclosable pecuniary interest is declared, the Member should withdraw from the room whilst the matter is discussed.

These declarations apply to all Members present, whether the Member is part of the meeting, attending to speak as a local Member on any item or simply observing the meeting from the public seating area.

There were no declarations of interest.

To consider any business which, by reason of special circumstances, the Chairman proposed to accept as urgent under Section 100(b)(4)(b) of the Local Government Act 1972.

There was no urgent business.

Members wishing to speak pursuant to Standing Order 34 should inform the Chair of their intention to do so and on what items they wish to be heard before a decision on that item is taken.

Councillors A Beales, R Coates, M de Whalley and T Parish were present under Standing Order 34.

There was no Chair’s correspondence.

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The Senior Internal Auditor presented the report and reminded the Committee that it received updates on progress made against the Annual Internal Audit Plan.  The report formed part of the overall reporting requirements to assist the Council in discharging its responsibilities in relation to the internal audit activity.

The Committee’s attention was drawn to the following section of the report:

·        Key Issues.

·        Significant changes to the approved Internal Audit Plan.

·        Progress made in delivering the agreed audit work.

·        The outcome arising from Internal Audit’s work.

·        Appendix 1 – Progress in completing the Agreed Audit Work.

·        Appendix 2 – Executive Summaries 2023/2024.

The Chair thanked the Senior Internal Auditor for the detailed report and invited questions and comments from the Committee, a summary of which is set out below.

In response to questions from Councillor Dark on the summary of key recommendations for starters, movers and leavers, the Senior Internal Auditor explained that there had been no previous audit undertaken and that the overall objective of the audit was to gain assurance that appropriate controls were in place in respect of systems and procedures.

The Committee was advised that there were different processes to follow when commencing employment with the Borough Council and it was important that the appropriate procedures was in place for the first day of employment.  The Senior Internal Auditor explained that when an employee left the Council it was important and needed to be timely.  Ideally the access to systems should be removed on the first working day after the employee left the organisation.

Councillor Dark commented on the starters, movers and leavers on the two medium priority recommendations and an overarching procedure document to be introduced and to review the list of system administrator recipients.

In response to questions from Councillor Jones on reviewing/removing all permissions to systems when an employee left the authority, the Senior Internal Auditor explained that a discussion was held with the appropriate line manager to review/remove permissions.  The Committee was informed that a wider decision on licensing requirements would be needed to determine if additional licences should be purchased if employees transferred to another service area, etc.

In response to questions from Councillor de Winton on conducting a full review of assets and equipment across the organisation, the Senior Internal Auditor explained that currently there was a lack of information recorded in some instances and it had been recommended the asset register be updated where required which would also include ICT Loan agreements within the review process.

Following further questions from Councillor de Winton, the Senior Internal Auditor explained that equipment issued to individual employees varied from role to role. 

In response to questions from Councillor Bearshaw as to why the Organisational Development – Training audit had been deferred, the Senior Internal Auditor explained that the audit would not be undertaken during the current financial year.  The audit had been deferred to 2024/2025 so that assurance could be gained  ...  view the full minutes text for item A128

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The Senior Internal Auditor explained that the report was aimed to provide the following in respect of the period April 2023 to September 2023 for areas such as Council Tax, Council Tax Reduction Scheme, Business Rates, Housing Waiting List, Duplicate invoices, False payments, Debtor Tracing activities and Internal Fraud where it arises:

•           Progress towards the Anti-Fraud and Anti-Corruption Key Performance Indicators assigned to the Internal Audit Department.

•           Statistical information in respect of fraud and error detection for applications and claims received by the Council deemed to have been false, incorrect, or where a relevant change in circumstances has failed to be declared resulting in a financial gain or where an error has been identified and amended.

•           Statistical information in respect of traced debts where the Internal Audit Team have been contacted for assistance.

•           Statistical information in respect of fraud and error detection for grants retrospectively identified as having been paid to customers/businesses who were not eligible.

•           Statistical information in respect of data matching activities undertaken through the National Fraud Initiative (NFI) and Norfolk Fraud Hub.

•           A look forward for the remainder of the financial year’s anti-fraud and anti-corruption related activities.

The Committee’s attention was drawn to the following sections of the report:

·        Key Issues.

·        Fig 1 – Fraud and Error comparison year to date against previous years.

·        Report overview.

·        Key Performance Indicators.

·        Fig 2 – KPI Target

·        Fig 3 – Overall investigation processing progress.

·        Overview of Fraud/Error Detection.

·        Detailed Overview of Fraud/Error Detection.

·        Other Identified Errors

·        Debtor Tracing Activities.

·        Data Matching Activities.

·        Single Persons Discount Project.

·        Overall Data Matching Activities.

·        Covid-19 Business Grants.

·        Other Schemes.

·        Anti-Fraud and Ant-Corruption Culture.

·        Projects/Future Pipeline of Activities.

The Chair, Councillor Ryves thanked the Senior Internal Auditor for the report and invited comments and questions from the Committee, a summary of which is set out below.

The Senior Internal Auditor clarified the definition of fraud and advised that there had been no serious incidents of fraud and this was a compliance approach. 

Councillor Bearshaw drew attention to Figure 1 – fraud and error comparison year to date against previous years and commented that it would be useful to see the previous four years data illustrating increases.  In response, the Senior Internal Auditor explained that generally there was a rise in the number of cases due to the increase in population within the Borough but not to the level reported and added it would be necessary to look at the data to determine why it had happened.  The Senior Internal Auditor highlighted the importance of undertaking the exercise and added that the data set out at Figure 1 helped to identify fraudulent/errors in activities and advised that efficiencies had been found in the process.

Councillor Dark asked the following questions:

1)               Where the Borough Council was the organisation that draws money in  for other preceptors, for example, Parish Councils, Norfolk County Council and the Police, what was the  ...  view the full minutes text for item A129

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The Financial Services Manager presented the report and reminded the Committee that the Council had formally adopted the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management (revised 2021) that remained fully compliant with its requirements.  One of the primary requirements of the Code was receipt by Council of a quarterly Review Report.

The Committee was informed that the Quarterly Review report had been prepared in compliance with CIPFA’s Code of Practice, and covered the following:

·        A review of the Treasury Management Strategy.

·        The Council’s capital expenditure (prudential indicators).

·        An economic update for the first six months of 2023/2024.

Additional Supporting Information:

·        Appendix 1 – Economic Update.

·        Appendix 2 – Interest Rates forecasts.

·        Appendix 3 – Prudential and Treasury Indicators for 2023/2024.

·        Appendix 4 – Investment Portfolio.

·        Appendix 5 – Approved countries for investment.

The Chair, Councillor Ryves thanked the Financial Services Manager for the report and invited comments and questions from the Committee, a summary of which is set out below.

The Financial Services Manager provided clarification on how internal borrowing was defined.

Councillor Dark informed the Committee that the Corporate Performance Panel had previously received a presentation on the Council’s investments and referred to a recent article in the media on ethical investments by another local authority and asked how regularly the council reviewed its investments noting that the last report had provided reassurance to Councillors at that point.

The Financial Services Manager explained that Appendix 5 set out the approved countries for investments as at 30 June 2023 and was presented to Cabinet and Full Council in February of each year.  The Committee was advised that the list could be reviewed at any time but normally practice was on an annual basis.

In response to questions from Councillor de Winton relating to Environmental Social Governance Reporting, the Financial Services Manager explained this was not currently set out as a priority in the Council’s Treasury Management Strategy.  The Assistant Director, Resources commented that this was a hot topic for local authorities but was not a mandatory requirement at this time.  ESG was in its early days of development and the Council would continue to monitor the guidance and take into account any actions which may be required in future reports.  The Assistant Director, Resources advised that clarification would be sought on the timeframe and be brought back through the correct democratic process.

Under Standing Order 34, Councillor Beales commented  the Council was responsible to the taxpayer for public money and this responsibility did not change whatever the political leadership may be.

Councillor Dark added that these were comments made by Councillors under the previous Administration relating to investments using a lot of public money that may be placed in companies/areas that were questionable. Officers had provided a satisfactory response at that time but it may be prudent for the Council to undertake another review of the investment portfolio.

At the invitation  ...  view the full minutes text for item A130

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The Financial Services Manager presented the Budget Monitoring Report for Quarter 2 and drew the Committee’s attention to the following sections of the report:

·        Summary.

·        Revenue Budget 2023/2024.

·        Turnover Savings.

·        Opportunities/Risks.

·        Grants.

·        Capital Budget and Spend 2023/2024.

·        Reserves.

·        Age Debt Analysis.

·        Council Tax and Business Rates.

·        Treasury Management 2023/2024.

·        Prudential Indicators.

·        Loans.

·        Investments as at 30 September 2023.

·        Conclusion.

The Financial Services Manager highlighted the following sections of the report as set out below:

·        Table at page 71 which set out the contribution from General Fund Reserves – the original budget was £2,641,520 and the forecast at 30 September 2023 was £3,145, 260 and a variance of £503,749 was reported.  The Financial Services outlined the reasons why a variance was being reported.

·        Capital Programme original budget £67m, the spend as at 30 September 2023 £12.7m and a revised capital programme of £36m.

·        Sect 2.4 Risk and Opportunities.

·        Appendix A – Budget Monitoring Variances 30 September 2023.

·        Appendix B – Capital Programme.

·        Appendix C – Age Debt Analysis 30 September 2023

The Chair, Councillor Ryves thanked the Financial Services Manager for the report and invited questions and comments from the Committee, a summary of which is set out below:

Councillor Morley, Portfolio for Finance responded to questions from Councillor Dark in relation to the expenditure on the Council’s car parks and gave assurance that the Car Parking Strategy would be taken into account following receipt of the consultant’s report.

The Financial Services Manager responded to questions from Councillor de Winton on the reduced level of planning income and volumes of planning applications received.

The Portfolio Holder, Finance responded to questions from Councillor de Winton on the planning income, solar panels and solar parks.

The Assistant Director, Resources advised that the planning income was expected to be £2m and it was around £1.1- £1.2 expected to achieve and there had been some turnover savings which had offset it.

The Portfolio Holder for Finance commented that there was an issue with planning revenue and also with Alive West Norfolk in the consuming levels of energy at the three swimming pools which presented a big risk to the Borough Council. 

The Assistant Director Resources and Financial Services Manager responded to questions from the Chair in relation to the deficit of West Norfolk Property and the arrangement for the leases as an interim measure until the later part of 2024 when the loan facility would be in place.

The Chair referred to the electricity costs incurred and asked if the figures included leisure.  The Financial Services Manager commented that he echoed the comments made by the Finance Portfolio Holder in relation to the costs incurred heating three swimming pools.  The Committee was informed that there was pressure on the Council last year to increase the budget for utility costs and that consumption figures were being monitored.  The best forecast was therefore £2.1m an increase of £90,000.

The Assistant Director responded to questions from  ...  view the full minutes text for item A131

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The Committee noted the Cabinet Forward Decisions List.

To note the Committee’s Work Programme for 2023/2024.

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The Committee noted the work programme.

In response to a question from Councillor Dark on whether the External Auditor’s report would be available for the additional meeting on the 12 December, the Assistant Director, Resources provided an update and outlined the reasons why it would not be presented to the Committee on 12 December.  A discussion would therefore be held with the Chair and the Vice Chair to decide if the 12 December meeting should be cancelled.  The Committee was advised that a meeting would be scheduled with the Council’s Statutory Officers and a follow up letter expressing the Council’s concerns be sent to the Minister, Local Government.  The draft follow up letter would be discussed with the Chair.  A separate letter would also be sent to the local MP setting out the Council’s concerns.

To note that the date of the next meeting of the Audit Committee will take place on 12 December 2023 at 4.30 pm in the Council Chamber, Town Hall, King’s Lynn.

The next meeting of the Audit Committee will take place on 12 December 2023 at 4.30pm in the Council Chamber, Town Hall, King’s Lynn.