Agenda and draft minutes

To receive any apologies of absence.

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Apologies were received from Councillor Dark and Councillor Bone.

To approve the minutes from the Audit Committee held on the 3^rd October 2024.

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RESOLVED: The minutes from the meeting held on the 3^rd October 2024 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 was none.

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 under Standing Order 7.

Members wishing to speak pursuant to Standing Order 34 should inform the Chairman of their intention to do so and on what items they wish to be heard before the meeting commences.  Any Member attending the meeting under Standing Order 34 will only be permitted to speak on those items which have been previously notified to the Chairman

Councillor Morley and Councillor Beales were present under Standing Order 34.

There was none.

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The Environmental Health Manager presented the report and explained the Borough Council had a responsibility as a Category 1 responder under the Civil Contingencies Act 2004 to develop and maintain a plan to ensure that key services were continued. He highlighted to the Committee the difference in the Significant Incident Team and the Emergency Planning Team. 

The Environmental Health Manager referred the Committee to 1.2 of the report which outlined a framework of the business continuity management. Additionally, he referred to 1.4 which showed a flow chart of how the initial Council response in different scenarios would be carried out Further in the report. He then highlighted para 2.2 which advised a risk assessment had been undertaken to identify potential threats, in which threat cards were updated in September 2023 and include, loss of staff, loss of ICT, loss of King’s Court and fuel shortage.

Finally, the Environmental Health Manger highlighted the progress made since the last report and the forward work plan.

The Chair invited questions and comments from the Committee.

Councillor Long commented the report outlined there was plans ready when needed and sought clarification on the resilience within available properties we had if we lost King’s Court.

The Environmental Health Manager confirmed properties such as Valentines Road in Hunstanton were an example of alternative sites which staff could work from. He added this planning prior to the Covid outbreak enabled staff to be quickly redeployed to other sites to reduce staff numbers at King’s Court during the pandemic. He added remote and home working would be considered as an advantage in the business continuity plan. 

Councillor Bearshaw referred to the recommendations and commented it was difficult to review the business continuity in the detail. He referred to part 3 and 4 of the report and asked if a bow tie analysis had been carried out as this part of the report did not reflect this being done.

Councillor de Winton sought clarification if our data was stored off site or are we reliant on the cloud.

The Assistant Director for Resources and Section 151 Officer advised Councillor Bearshaw, she would liaise with the relevant Officer and respond to his question. 

In addition, she provided assurance in response to Councillor de Winton’s question, there was various methods in which the data was backed up and stored and confirmed this included being stored off site. She added she would provide a robust response from the IT Manager.

Councillor Morley, Portfolio Holder for Resource added the data was backed up and stored at a remote and isolated site in Fakenham.

Councillor Devulapalli asked if we liaised with other organisations and local authorities on the business continuity plan.

The Environmental Health Manager explained this was the Borough Council business continuity arrangements however there was Norfolk Resilience Forum which provided information and support and other agencies such as the National Cyber Security Centre.

The Chair, Councillor Ryves asked if the subsidiary  ...  view the full minutes text for item A209

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The Head of Internal Audit presented the report to the Committee and highlighted the change to the 2024/2025 Audit Plan which was the applications audit of the Revenues and Benefit System. She explained this was deferred due to staff illness and capacity to fulfil the audit.

She explained in Quarter 1, all five audits had reached the final stage of reporting and Appendix 1 outlined the assurance opinion given and the number of recommendations. She added Quarter 3 was on track and work had commenced. The Head of Internal Audit explained not all the audits in Quarter 4 may be completed as some audits are behind and are moving into other quarters. She highlighted the Contract Management audit had been given a limited assurance opinion.

The Chair thanked the Head of Internal Audit invited questions and comments from the Committee.

Councillor Long commented the limited assurance opinion on the Contract Management audit related to the work carried out by Corporate Performance Panel’s Informal Working Group which was to be discussed at their next meeting.

Councillor Bearshaw sought clarification on the backlog of findings and what was the trend of theses. He additionally asked if a risk-based strategy would be taken on the audits which were being considered for deferral and cancellation.

The Head of Internal Audit responded to Councillor Bearshaw question and confirmed the audits which would be deferred or cancelled in quarter 4 would be considered on a risk basis. She indicated that the audit on elections as an example and advised this could be deferred as there had been elections carried out with no issues.

Councillor Morley, Portfolio Holder commented there was a weakness and organisational issues in contract management within the Borough Council. He explained the difference between procurement and contract management. Councillor Morley advised the Procurement Act 2023 has not yet been sanction by Central Government. He explained before the Procurement Strategy and Transformation was to be presented to Corporate Performance Panel after the Act was sanction by Central Government. Councillor Morley commented a designated Officer was to manage the contractors which had not always happened.

The Chair, Councillor Ryves sought clarification on a timetable for the procurement transformation.

Councillor Morley, Portfolio Holder commented it was likely to be in the new year provided the Procurement Act 2023 was sanction.

The Monitoring Officer addressed the Committee, and the procurement changes were to be implemented in February 2025 but was being considered as a two-year programme. She advised a project team along with the transformation programme was underway and referred Members to the pre-Council briefing which was held previously. She explained there was an implementation plan and a Communication and Engagement Plan. She provided assurance to Members that further information would be provided on procurement and contract management. She added included in the implementation was upskilling and training of Officers.

Councillor Devulapalli commented she felt reassured by the Officers comments but noted the inconsistency with the  ...  view the full minutes text for item A210

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The Senior Internal Auditor presented the recommendation follow up report to the Committee. He highlighted there was positive progress since the last report to the Committee in May 2024. He added 59 recommendations have been completed and 72 recommendations remain overdue which included 6 high priority recommendations. He brought to the Committee’s attention the follow up process was outline in Section 2 of the report along with Table 1 at 3.1 of the report outlines the position of the recommendations as of the 25^th October 2024.

The Senior Internal Auditor referred to page 55 of the agenda and explained Figure 1 was a direct comparison to the last position present to the Committee and show the position for high and medium overdue recommendations by 100 days and by 365 days or more. He referred to section 4 of the report highlights the outstanding risks association with overdue recommendations. He advised appendices 1 and 2 provide the outstanding high and medium recommendations in further details. He brought to the Committee’s attention the Senior Leadership Team would be discussing the outstanding recommendations at their meeting on the 19^th November 2024.

The Chair invited comments and questions from the Committee.

The Chair, Councillor Ryves commented he was disappointed there was still a high number of outstanding recommendations and hoped there was more progress.

Councillor Bearshaw commented the recommendations were overdue but understood the outstanding recommendations were big projects. He sought clarification on forecasting the deadline date, so the recommendations were no longer overdue and a more realistic measure.

In response to Councillor Bearshaw comment the Assistant Director of Resources and Section 151 Officer agreed to discuss this with the Senior Leadership Team.

Councillor de Winton recognised that a number of the overdue recommendations were not in control of the Borough Council. He referred to page 59, the procurement and contract management audit which was a high overdue recommendation was not in the control of the Borough Council due to awaiting implementation of new legislation. He questioned if a disclaimer could be added to the report to highlight this was out of the control of Borough Council. He commented his disappointed the outstanding recommendation on page 66, the accounts receivable audit.

The Senior Internal Auditor agreed the report would be reviewed to see if this could be possible to be included in the next update to the Committee for outstanding recommendations which were out of the control of the Borough Council.

Councillor Long agreed with Councillor de Winton Comments and commented there was only concern for the outstanding recommendations with no external factors. He referred to the King’s Lynn Transport Strategy and commented it was positive to see progress had been made. 

The Assistant Director of Resources and Section 151 Officer responded to Councillor de Winton comment regarding the accounts receivable outstanding recommendation. She advised the Committee, in terms of the debt write off’s, the team were trying to get the  ...  view the full minutes text for item A211

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The Senior Internal Auditor presented the Half Year Fraud and Error Progress Report to the Committee. He advised Section 1 of the report provided a current overview nationally and purpose of the report, and this related to the period April to September 2024. He highlighted to the Committee that there had been recent surge in scams for Council Tax refunds and vulnerable members of our communities who use Careline support services had been targeted by scammers.

He referred to section 4 of the report and outlined the progress made against the KPI targets of 5000 fraud and corruption case investigations and 3,163 cases have been completed. He highlighted figure 4 in section 4 of the report which identified the number of outstanding cases and new cases received. He added, figure 5 showed a comparison against the previous 2 years to date. He brought to the Committee’s attention 4.3 of the report which included the SPD Canvass Review Project for the 5^th Year.

Councillor Bearshaw thanked Officers for their work and exceeding the KPI.  He referred to figures 3,4 and 5 and questioned why the amount which was being recovered was not as much as we previously had.

The Senior Internal Auditor explained figure 5 showed a full year for the previous 2 years against the first half year for this year. He added there would be additional value in the second half of the year which would exceed previous results.

Councillor de Winton referred to page 83, figure 1 and 2 and questioned why the number of cases investigates was 0 however figure 1 suggested conflicting information.

The Senior Internal Auditor explained a high volume of the work carried out was from the SPD Canvass review and a penalty procedure had been created. He added penalties would be given to negligence cases and Council Tax Support fraud.

Councillor de Winton sought clarification on Council Tax on second homes doubling being included in the fraud and error statistics. He asked if there were mechanisms in place to determine fraudulent cases.

The Senior Internal Auditor confirmed the National Fraud Initiative provides information on empty void properties within the Borough and a review exercise was being considered. He added the Council Tax team were working through the changes being made to the legislation.

The Assistant Director for Resources and Section 151 Officer advised the Committee, the work being carried out was to establish the baseline which included working with the Valuation Office as the second home will either fall within Council Tax or Business Rates listing dependant on the evidence and criteria.

The Senior Internal Auditor added further there was a National Fraud Initiative meeting recently which an additional data matching exercise was discussed in preparation for the premium on Council Tax for second homes.

The Chair, Councillor Ryves sought clarification on anti- corruption and fraud being the correct terminology.

The Senior Internal Auditor explained the fraud was different levels of  ...  view the full minutes text for item A212

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The Interim Financial Services Manager presented the Treasury Report for Quarter 2. He advised this was a progress report outlined the treasury function which included investment and borrowing. He explained the report highlighted the compliance of the treasury management. He brought to the Committee’s attention at the 30th September 2024 the investment total was £14,950,000 and the total borrowing was £10,000,000 which was from two market loans. He added there was no debt rescheduling during quarter 2.

The Interim Financial Services Manager added the report included an economic update which considered inflation decreasing and interest rates were at 5.0% as of the 30th September 2024. He added further interest rates were now 4.75% following the budget meeting in October.

The Chair thanked the Interim Financial Services Manager for the report and invited question and comments from the Committee.

The Chair, Councillor Ryves commented the amount of investment and borrowing was significant and with high interest rates and the Borough Council had a net beneficiary.

Councillor Long sought clarification on the position with lending to other Councils as highlighted in Appendix 4. He asked Officers for reassurance the loan would be repayable by the other Council if a Section 114 Notice was issued.

The Interim Financial Services Manager advised a third party was used to lend to other Council’s which act as a broker and co-ordinator and provide checks and due diligence when lending.

The Assistant Director of Resources and the Section 151 Officer added there was possibility a Council could default on a payment however this had not been known but confirmed checks were carried out before lending. In response to the Chair’s question she explained local authorities do not have a credit rating however some authorities may decided to be rated for investment purposes. She added further if a Section 114 Notice was issued the Council would revert to statutory services which could result in repayments of the loan not being paid.

RESOLVED: The Audit Committee noted the report and the treasury activity.

Appendix A- GPS Reset- Letter to Section 151 Officer

Appendix B- Statement of Accounts & Annual Governance Statements 2020/2021

Appendix C- Statement of Accounts & Annual Governance Statements 2021/2022

Appendix D- Statement of Accounts & Annual Governance Statements 2022/2023

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The Assistant Director of Resources and Section 151 Officer introduced the Annual Governance Statements and Statements of Accounts for 2020/2021, 2021/2022 and 2022/2023. She highlighted the backstop date of 13^th December 2024 and explained the urgency for these to be completed and signed off. She reminded the Committee due to the legislation a detail audit would not be carried out for years 2020/2021, 2021/2022 and 2022/23. She added once these were signed off, they would be published to the website.

The Assistant Director of Resources and Section 151 Officer brought to the Committee’s attention the recommendations included in the report which included delegated authority to herself and the Chair of the Committee to approve the Annual Governance Statements and Statements of Accounts once the External Auditor had issued a completion report and issued a disclaimed opinion.

The External Auditor explained there would be work carried out to rebuild the assurance to the Committee. He would be sharing the completion report with the Committee prior to the financial statements being signed off. He added the legislation allowed the audit to be closed off however audit standards would remain, and this was reflected in the completion report. 

Councillor Long commented the importance that it was not the Borough Council’s fault that the full detailed audit was not carried out and other local authorities were in the same positions. He added he wanted a full and detailed audit to be carried and felt conflicted due to his position as Leader during the years being discussed.

The Monitoring Officer provided advice to Councillor Long. She advised if he did not feel comfortable voting on the recommendation due to the circumstance, he outlined then it would be understood and needed to be reflected in the minutes.

Councillor Bearshaw endorsed the recommendation and thanked Officers for their work.

Councillor Long abstained from voting on the recommendations.

RESOLVED: The Audit Committee agreed the following; 

1.  Delegate authority to the Chair of this committee and the S151 Officer to approve the Statement of Accounts for 2020/2021, 2021/2022 and 2022/2023 when EY have completed their work and shared their audit completion report with members of the committee.

2.   Approve the final Annual Governance Statements for 2020/2021, 2021/2022 and 2022/2023.

To note the Committee’s Work Programme for 2024/2025.

RESOLVED: The Committee noted the Work Programme for 2024/2025.

To note that the date of the next meeting of the Audit Committee will take place on 20^th January 2025 at 4:30pm in the Town Hall, King’s Lynn.

The next meeting of the Audit Committee would be held on 20^th January 2024 at 4:30pm in the  Council Chamber, Town Hall, King’s Lynn.