Meeting documents

To approve as a correct record the Minute of the meeting held on 27 November, 2017, copy attached as an appendix.

RESOLVED –

That the minutes of the meeting held on 27 November, 2017, be approved as a correct record.

To consider the attached report.

Contact Officer:  Nuala Donnelly (01296) 585164

The Committee received a report from the External Auditors on their work associated with the certification of grant claims for 2016/17 submitted by AVDC.

From 1 April 2015, the duty to make arrangements for the certification of relevant claims and returns and to prescribe scales of fees for this work had been delegated to the Public Sector Audit Appointments Ltd (PSAA) by the Secretary of State for Communities and Local Government.

For 2016-17, these arrangements required only the certification of the housing benefits subsidy claim.  In certifying this the external auditors had followed a methodology determined by the Department for Work and Pensions and had not undertaken an audit of the claim.  Instead, the work involved executing prescribed tests which were designed to give reasonable assurance that claims and returns were fairly stated and in accordance with specified terms and conditions.  Where initial testing errors in the calculation of benefit or compilation of the claim were found, the certification guidance required the auditors to complete more extensive ‘40+’ or extended testing.

The external auditors reported that they had checked and certified the housing benefits subsidy claim with a total value of £44,887,809.  This had allowed them to meet the submission deadline.  A qualification letter had been issued, details of which were included in section 1 of the report.

The certification work had found errors which the Council had corrected. These amendments had increased the claim by £20,585 to £44,908,394, that was a marginal effect on the grant due.  With the history of the clawback in 2015-16, it had been noted that the Council had implemented most of the recommendations from last year and had improved arrangements significantly.

Fees for certification and other returns work were summarised in section 3.  The housing benefits subsidy claim fees for 2016-17 were published by the PSAA in March 2016 and were available on the PSAA’s website (www.psaa.co.uk).

The main issues reported had related to Cell 11 Non-HRA.  Testing of the initial sample had identified some incorrect classification of accommodation which had been classified as an error for subsidy purposes.

The results from the testing were as follows:-

·                    Cell 11 – all cases had been reviewed in full in order to correct the claim.  Due to amendments then made by the Council it had concluded that the Non-HRA cells were fairly stated.

·                    Cell 94 Rent Allowance: in line with DWP guidance, where errors had been identified in the prior year then, unless the authority could prove that the error type would not be replicated in the current year, work proceeded immediately to 40+ testing irrespective of the outcome of initial testing.  This was completed in respect of prior year errors identified on both Rent Allowance earnings and child care costs cases.  The following errors were identified:

o        Earnings – no errors had been in initial sampling of cases and 2 failures in the extended 40+ testing on a sub-population of 40 Rent Allowance cases with earnings. Both of these errors had resulted  ...  view the full minutes text for item 2.

To consider the attached report.

Contact Officer:  Kate Mulhearn (01296) 585724

A Notice of Motion in relation to the governance arrangements and operation of Aylesbury Vale Broadband Ltd had been submitted to full Council on 6 December, 2017, at which it had been resolved:-

(1)          That this Council will honour the commitment given by the Leader of the Council at the General Purposes Committee to review the position culminating in the decision to sell AVB and introduce a suitable mechanism for keeping all Members of the Council informed of the Council’s commercial activities.

(2)          That the Audit Committee be tasked with a detailed audit of the operation of AVB, as far as practicable within the timescales set out within the original Motion and to keep as much information as is possible in the public domain.

(3)          That the audit of AVB be undertaken by the Council’s externalised internal audit team (BDO) as they have experience of the governance of company structures.

(4)          That a brief for carrying out the review of AVB be agreed by Group Leaders, the Council’s Head of Internal Audit, a representative from BDO and the Chairman of the Audit Committee, with Group Leaders receiving a draft of the report prior to its submission to the Audit Committee, any such meetings involving Group Leaders to be chaired by the Deputy Leader of the Council.

(5)          That any meeting of the Audit Committee convened to consider the report findings be open to all members of the Council to attend and at the discretion of the Audit Committee Chairman, to participate in the discussions (although they would not be able to vote).

(6)          That insofar as the other commercial undertakings of the Council are concerned, reports on their activities be brought forward at regular intervals to the relevant Scrutiny Committee.

With regards to recommendation (2), the timescales set out in the original motion had asked for a review to commence no later than 1 calendar month from the sale of AVB or by 31 January 2018, whichever was sooner, and for it to report no more than 3 months after commencement, i.e. by 30 April 2018.

The Committee was informed that a timeline of events relating to this matter included:-

·                    December 2014 – Council had agreed to commit £1.536 million of New Homes Bonus funding to support the roll-out of superfast broadband across the District.

·                    March 2015 – Cabinet agreed the original AVB Business Case.

·                    April 2015 – Council approved the establishment of AVB as a limited liability company that was 95% owned by the Council and 5% owned by Ironic Thought, together with allocating £200K for a pilot project in Hogshaw, North Marston and Granborough parishes.

·                    September 2015 – AVB scrutinised by the Economy and Business Development Scrutiny Committee.

·                    October 2015 – Council approved further expenditure of £550K.

·                    March 2016 – AVB scrutinised by the Economy and Business Development Scrutiny Committee.

·                    April 2016 – Cabinet had agreed a document, "Guidance to creation and working with companies in which AVDC has a financial interest".

·                    April 2016 – Council approved  ...  view the full minutes text for item 3.

To consider the attached report.

Contact Officer:  Kate Mulhearn (01296) 585724

The Committee received a progress report on assurance work activity undertaken against the 2017/18 Assurance Plan that had been approved by the Audit Committee in July 2017.

The following matters were highlighted:-

Final Reports issued since the previous Committee Meeting

The Council Tax and Business Rates review had been completed and contained 1 high risk and 4 low risk recommendations.  Overall, the report had been classified as Medium Risk with key findings summarised as follows:-

·                    Council tax reconciliations between the Northgate revenue system and the Tech One finance system had not been performed since May 2017 and business rates reconciliations had not been performed since July 2017. There was also no regular reconciliation performed between the debt recovery system (Ash) and Tech One. (High)

·                    There was an estimated £1.5m in irrecoverable council tax debt which was fully provided, but had not been written off, despite previous audit recommendations to review and action. (Low)

·                    No monthly collection monitoring reports were produced and circulated to senior management between April and October 2017. Reports were now being produced but further work was required to embed the reporting and review processes. (Low)

·                    the sample had identified one council tax account where a customer had been placed on a closed period council tax reduction scheme in error, when she should have been on an open ended one, resulting in incorrect billing. There were no checks in the Northgate system to prevent other similar errors occurring. (Low)

·                    The Council was not monitoring temporarily banded properties and properties yet to be valued so that they could inform the VOA when the expected 90 day period expired. (Low)

The audit had recognised that the restructure over the past year had left the teams with many new staff inexperienced in the Northgate and Finance systems.  However, there were fundamental processes and procedures that were not currently being adhered which the Council needed to address.

2017/18 Internal Audit Plan work in progress

Members were informed that reviews of Building Control and Taxi Licensing were being scoped with a view to audit commencing in February 2018.  The field work for the Housing Benefits review had been completed and the report was being prepared.

Implementation of agreed audit actions

Internal Audit monitored the implementation of actions and recommendations raised by reviews to ensure that the control weaknesses identified had been satisfactorily addressed.  Actions arising from low risk audit findings were followed up by management and reviewed, but not validated by internal audit.

The overall progress and detail of those actions which were considered to be due were set out in Appendix 3 to the report. At the end of December 2017, a total of 116 discrete audit actions had been identified from reviews occurring during 2015, 2016 and 2017, of which 42 have been completed to date.  Of the 74 remaining audit actions, 18 have arisen from "High" risk audit issues, 22 from "Medium" and 34 related to "Low" risk audit findings.  A summary of all of these actions was included at  ...  view the full minutes text for item 4.

To consider the future work programme.

Contact Officer:  Kate Mulhearn (01296) 585724

The Committee considered the future Work Programme which took account of comments and requests made at previous Committee meetings and particular views expressed at the meeting, and the requirements of the internal and external audit processes.

Members were informed that the Annual Governance Statement would likely be reported to the 26 June 2018 meeting.

Action Point: The Committee requested that a report in relation to Delegation of financial approval authority be submitted to the next meeting.

It was agreed that the Action Point Tracker be included with the Work Programme on future agendas, with each Action Point given a unique identification number.  With regard to current action points:-

·                    Planning and Planning Enforcement Review – a further report be provided in six months time.

·                    Commercial Property Service Charges Review – a further report be provided to the next meeting.  Members were informed that this matter would be reviewed by the Finance Steering Group at its next meeting.

·                    Risk Register (Risk 14: Failure to manage a major partnership) had been updated to include Enterprise Zones.

RESOLVED –

That the future Work Programme as discussed at the meeting be approved.

To consider the attached report.

Contact Officer:  Kate Mulhearn (01296) 585724

The Audit Committee had a role to monitor the effectiveness of risk management and internal control across the Council.  As part of discharging this role the committee was asked to review the Corporate Risk Register (CRR).  The CRR provided evidence of a risk aware and risk managed organisation and reflected the risks that were on the current radar for Commercial Board.  Some of the risks were not dissimilar to those faced across other local authorities.

Since the previous Audit Committee meeting in November 2017 the following risks had changed:

The following matter is for consideration by Members "In Committee". It will therefore be necessary to

RESOLVE –

That under Section 100(A)(4) of the Local Government Act, 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in the Paragraph indicated in Part 1 of Schedule 12A of the Act.

Item No. 11 – Risk Management Report

The public interest in maintaining the exemption outweighs the public interest in disclosing the information because the report contains information relating to the financial or business affairs of organisations (including the Authority holding that information) and disclosure of commercially sensitive information would prejudice negotiations for contracts and land disposals or transactions.

RESOLVED –

That under Section 100(A)(4) of the Local Government Act, 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in the Paragraph indicated in Part 1 of Schedule 12A of the Act.

The public interest in maintaining the exemptions outweighed the public interest in disclosing the information because the documents contained information relating to the financial or business affairs of organisations (including the authority holding that information), and disclosure of commercially sensitive information would prejudice negotiations for contracts and land disposals/transactions.

To consider the attached confidential report.

Contact Officer:  Kate Mulhearn (01296) 585724

As part of the discussions at Minute 7, consideration was given to the Council’s Corporate Risk Register.