Agenda item

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The Monitoring Officer presented the report.

The Chair thanked the Monitoring Officer for the report and invited questions and comments from the Committee. He reminded members Alive West Norfolk had ceased trading however was still relevant for the 2024/2025 audit.

Councillor Long commented the report was helpful as the arrangement and mechanism was difficult to understand. He questioned what alternatives for governance and dealing with the companies were there. He added he accepted the method as both companies were delivering and stressed the importance of monitoring performance and accountability. 

The Chair, Councillor Ryves commented on other areas which had resulted in financial disasters due to council owned companies. He commented the Committee needed to consider how other council’s deal with companies. He sought assurance on the internal audit opinion in relation to page 31 of the agenda.

The Monitoring Officer provided assurance that progress had been made following the internal audit. She explained there was a few documents outstanding - e.g. service level agreement but confirmed Officers were working on this being completed.

The Portfolio Holder, Councillor Morley commented the governance documents were complex and confusing and needed to be explained in simple terms. He identified the relationship of the documents with the Annual Governance Statements.

The Monitoring Officer explained to the Committee that fact sheets for both housing companies along with a member briefing and further information on the intranet would be made available for members to gain a better understanding.

The Head of Internal Audit provided further assurance to the Committee the Council and Companies were following best practice from CIPFA and local partnership company.

The Chair Councillor Ryves and Councillor Long commented they felt comforted hearing best practice was being followed. Councillor Long provided context of the reasoning both companies were set up.

The Vice – Chair, Councillor de Winton commented there was a risk as the companies were under Council management, Directors and Shareholders. He commented the Committee needed to feel confident the Council was not being put at financial risk. He sought clarification with the loan deed of variation.

The Assistant Director for Finance and Deputy Section 151 Officer explained this related to the interest rate of the loan which the interest was being calculated on a regular basis which was not the intention. He explained this had now been recalculated and reconciled due to a misunderstanding of the original agreement.

In response to a further question from Councillor de Winton, the Deputy Chief Executive and Section 151 Officer clarified that the deed of variation corrected a misunderstanding in the original loan agreement, and the Council acts as lender to the housing company, using working capital or borrowing as needed. She added further the arrangement and its impact on company finances were explained in detail. She highlighted to the Committee; the loan was repayable at 4.5% above the bank rate and as this became unaffordable for the company discussions were being held on a new arrangement.

The Committee provided feedback and agreed clarification on the governance documents was needed which was to be addressed through training.

RESOLVED:  1) The Annual Assurance Report from Shareholder attached as Annex 1 was received by the Audit Committee with thanks to the Shareholder.

2) The Audit Committee was invited to formulate any recommendation and feedback to the Shareholder in response to the Annual Assurance Report