Agenda item

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The Monitoring Officer presented the Annual Governance Statements 2022-23 and 2023-24 in draft form.

The Monitoring Officer explained to the Committee this was a statutory requirement alongside the statement of accounts and the aim was to raise the profile of the Annual Governance Statements (AGS) to Officers and Members. She added the AGS was a review of the effectiveness of the Council governance arrangements and the document was created to be readable and easily accessible.

She provided a summary of the framework of the AGS and advised it complied with the CIPFA regulations and framework. She advised included in the AGS were 8 CIPFA principles against which it was set out what  went well and what did not go so well, which in turn  would feed into the action plan. 

The Monitoring Officer referred to 5.2 of the AGS which was a detailed review of effectiveness against the governance framework. She added included in 5.2 was Performance Monitoring, the Corporate Performance Panel (number of call in’s of executive decisions), Monitoring Officer, Chief Finance Officer, Head of Internal Audit, Anti-Fraud and Anti-Corruption, Information Governance, Policy Framework, Risk Management, Procurement and Contract Management, Equality, Diversion and Inclusion, Personnel Services, Information Technology and Data, Wholly Owned Companies, Place, Funding and Projects and External Assurance.

She highlighted to the Committee; section 6 set out the significant governance issues over the year. She explained schedule 1 was an action plan which was a requirement of the regulations.

The Monitoring Officer explained the action plan was being reflected in directorate plans and advised the AGS action plan enables the Corporate Strategy and Council business to be delivered.

The Monitoring Officer advised of an amendment to the second recommendation and explained the Audit Committee were being asked to approve the Annual Governance Statement 2022/23 and 2023/24 in draft pending the External Auditors feedback and comments.

Councillor de Winton stated his concern on the non-compliant spend and sought clarification of the definition of non-compliant spend.

The Monitoring Officer advised non- compliant spend meant it had not been evidenced that contract standing orders were followed in terms of the procurement procedure. She referred to the report and confirmed only big spends were considered as that was where the issues were. The Monitoring Officer explained that the bulk of the issues were where contracts were initially procured in line the with thresholds however Officers keep going back to the same contractor for the same nature of work, which has to be treated as accumulated spend not individual contracts. She added the overall spend on the contractor overtime is then considered and this will have become non-compliant whit thresholds because of the accumulation. She highlighted to members a procurement transformation was underway which would be addressing these matters. 

The Chair, Councillor Ryves sought clarification in the non-complaint spend being 15% however the contracts might be extended over 12 months period.

The Monitoring Officer explained the contracts were for that financial year and would then be extended further.

Councillor de Winton asked if this was a question of lack of oversight.

The Monitoring Officer commented she believed it was a cultural issue and lack of understanding therefore a training, communications and engagement plan was to be put in place for Officers.

Councillor de Winton sought further clarification if this was an overview issue and provided examples of approving purchase orders not being checked effectively and correctly. He commented there was a weakness in the process and the checks of the level of spending. 

The Monitoring Officer explained the current system was not sophisticated enough and set up to carry out checks of non-compliant spend or check if the contract has been procured understanding order however it does check the purchase orders were being approved under financial procedures and authorisations

The Assistant Director, Resources and Section 151 Officer commented the issue was contract management and this was the area confidence and training was to be built. She added the non- compliant spend highlight in the report was assumed as there was no resource for this to be checked in detail. She clarified further processes and procedures were being put in place to monitor the non-compliant spend.

The Senior Internal Auditor added a review of contract management was to be included as part of the internal audit annual plan.

Councillor Dark brought to the Committee’s attention, 14.12% was the financial figure out of the total non- compliant spend and sought clarification on how many contracts had been non-compliant and how did this figure compare to other local authorities.

The Assistant Director Resources and Section 151 Officer referred to page 69 and provided context of the figures to the Committee. She highlighted in the report, the top 200 contracts based on revenue spend and top 70 contracts based on capital spend. She added further, for a further a breakdown it would need to be considered whether the information was available in that format.

The Monitoring Officer advised there was no information available now to be able to compare to other local authorities however she referred to new interim strategic lead had provided assurance our position was not dissimilar to other authorities, it is a challenge all local authorities face.

The Senior Internal Auditor added there was variables to thresholds between local authorities which make direct comparisons difficult.

The Vice- Chair, Councillor Bone referred to the anti-fraud and anti- corruption figures and commented his concerns that less than half of the money was traced. He asked if the systems and procedures were not put in place to monitor this.

The Senior Internal Auditor referred to page 66/67 and explained these were 2 separate sets of details. He added the first set of figures related to the fraud and investigation work carried out. He commented further the second set of figures relate the number of debtors traced. 

Councillor Morley referred to previous AGS and the lack of understanding and importance of this. He commended officers for their work on the new AGS and added to the importance of the AGS including what the issues were and what was being done to rectify these issues. He added the new procurement act had been deferred and thresholds would be considered as part of the procurement transformation. 

The Chair, Councillor Ryves agreed with Councillor Morley and thanked officers for the new format and layout of the AGS and commented how informative and easy it was to read.

Councillor Devulapalli referred to page 67and the Freedom of Information request was given to East Law to be responsible. She sought clarification on the percentage of request were completed within the statutory 20- working day target was unknown and asked if we could get this information from them.

The Monitoring Officer commented the contract ended in April 2023 and this information was not collated. She added this data was now being collated as shown in the 2023/24 AGS.

RESOLVED:

a)                            The Audit Committee confirmed the Annual Governance Statements 2022/23 and 2023/24 properly reflect the risk environment and that actions required to improve it are in hand.

b)                            The Audit Committee approved the Annual Governance Statements 2022/23 and 2023/24 in draft pending the External Auditors feedback and comments.