Meeting documents

Apologies for absence were received from Alan Stevens.

Richard Scott declared an interest in Agenda item 4 (the Pension Fund Accounts) as he was a Trustee of the Pension Fund.

of the meeting held on 25 June 2014 to be confirmed as a correct record

The Minutes of the meeting held on 25 June 2014 were agreed and signed as a correct record, with the following amendment:

·       Page 5, 3^rd paragraph should read "… There was a decrease in the general fund of £8.56m…

The draft Accounts had been discussed at the meeting on 25 June 2014. The audited version of the Accounts was now before the Committee.

BCC Accounts

Richard Ambrose, Service Director, Finance and Commercial Services, thanked Grant Thornton for their work in auditing the Accounts.

There had been some changes to the Accounts as a result of the audit.

BCC had not complied with the code in reference to the rolling programme of asset valuations. There was no overall impact on the general fund.

Draft responses had been given to the proposed action plans

An unqualified opinion had been given on the financial statements.

A qualified opinion had been given on Value for Money (VFM), which directly related to the Children’s Safeguarding Ofsted Inspection. Grant Thornton would take account of the progress the Council made against the action plan, and it was hoped that the VFM opinion would be unqualified by the end of 2014-15. The Council had agreed £4.8m of general fund reserves for Children’s Safeguarding the previous week.

Elspeth O’Neill said that there were five main changes, which were mainly reclassifications. Note 14 (a disposal relating to an academy) had been reclassified. There were also reclassifications relating to Note 20 and 3 items of re-categorisation. There was no overall impact on the general fund.

The Audit was not yet completed and there was one unadjusted statement.

There was also the non-compliance with the code in reference to the five year rolling programme of asset valuations. They were also likely to be non-compliant in 2014-15.

A member asked about absence provision. Elspeth O’Neill said that it had previously been classified as a provision. It had now been re-categorised as a creditor reccrual.

A member asked about the rolling valuation rules. Richard Ambrose said that they had always valued 20% of each class, as this was more accurate. A lot of local authorities had taken a similar approach.

A member referred to page 16 (page 10 of the Accounts), first sentence underneath the table, and asked if it should say ‘more,’ rather than ‘less.’ Richard Ambrose said that this was in regard to the purely financing line on the income side.

A member referred to page 5, regarding the revaluation of the code. Elspeth O’Neill said that they would be looking at the depreciation policy. Paul Grady said that the auditors were happy with this approach.

Paul Grady then referred members to the Grant Thornton Audit Findings Report for BCC.

Paul Grady said that they anticipated giving an unqualified opinion. The quality of the accounts was good. Page 5 showed good commitment to transparency.

Overall the accounts were materially accurate. There had been some issues regarding presentation, disclosure and notes to the Accounts.

In the current year the Finance Team had the challenge of the subsidiary companies, which had an impact on capacity.  Judgements remained sound, and where it mattered the quality remained high.

On the issue of PPE, the Council was in a similar position to many other Councils. CIPFA  ...  view the full minutes text for item 4.

Anne Davies, Monitoring Officer

Sara Turnbull and Ben Cahill were welcomed to the meeting.

Sara Turnbull said that they had focused on the changes to the Constitution which were important for good governance for Future Shape (the essential elements).

Readability and accuracy had also been looked at.

Ben Cahill said that they had shaped a lot through members’ comments and comments from the Monitoring Officer and the Service Director for Finance and Commercial Services.

Ben Cahill took members through the key proposed changes summarised in the covering report.

A role had been added for Regulatory and Audit Committee in relation to potential conflicts of interest in the Executive Standing Orders.

Advice had been taken from the Service Director for Finance and Commercial Services and the Assistant Service Director (Strategic Finance) about the Financial Regulations.

Codes and protocols had been tidied up.

The glossary was not yet finished.

If members had any further changes to be made, they were asked to let Ben Cahill know.

A member said that officers had done an excellent job on a difficult document. The member referred to Page 170, B4.10 and said that ‘sound’ should be replaced with another word (suggested ‘appropriate’) – Action: BC

The member also said that there did not seem to be any cap on borrowing by Business Units.

Richard Ambrose said that currently if a Service area wanted to borrow money, they had to include the prudential indicators to Council. There were caps. Any increase had to be approved by Cabinet. Richard Ambrose said that he agreed that any borrowing by Business Units should be reported back to full Council – Action: BC

A member asked what the reporting procedures would be from the Business Units.

Richard Ambrose said that the Business Unit Management Boards would report monthly. Transformational changes would go to the One Council Board. Richard Ambrose suggested that the reporting from Business Units could be strengthened in the Operating Framework – Action: RA / ST

Sara Turnbull said that they could look at mechanisms specifically for reporting back to members. A member noted that Business Unit Boards had members on them.

A member referred to the ‘Capital Programme’ and ‘Capital Investment Strategy’ and said that these phrases were used interchangeably. These were not in the glossary.

Richard Ambrose said that the Capital Investment Strategy was approved by Cabinet. The Capital Programme was approved by Council.

A member referred to Page 169, B4.2 and said that it referred to two clauses which did not exist.

Richard Ambrose said that the numbering had been changed.

A member referred to page 174, B8.2.1, and asked how the figure of 25% had been assessed. The member said that they were used to working in companies where all the profits went back to the centre.

Richard Ambrose said that the current rules on carry-forward allowed 50% of underspend to be carried forward. The thought in changing this to 25% was to further incentivise the Units. They had also put in a clause that Cabinet could overrule  ...  view the full minutes text for item 5.

Ruth Vigor-Hedderly, Cabinet Member for Transportation, was welcomed to the meeting.

Ruth Vigor-Hedderly introduced Gill Harding and Mike Nottman.

Ruth Vigor-Hedderly said the following:

·       Ruth Vigor-Hedderly had been Cabinet Member since 1 April 2014, and had instructed an independent company (Gate One) to carry out a health check on the contractual arrangement.

·       Ruth Vigor-Hedderly had gone forward to bring local delivery into areas. The Amersham depot had opened, with David Molyneaux as the Interim Manager. Handy Cross depot had been re-profiled. Griffin Lane deport would open on 1 October 2014.

·       The work in Buckinghamshire was very diverse. All Local Area Technicians operated from a local depot. This benefitted local residents and was a more effective approach in terms of scheduling.

·       KPIs were to be set at each depot at local level, and would feed into the main KPI contract.

·       The area-based approach had seen a 60% reduction in road closures. There had also been a better collaborative working mechanism with local members.

·       At one stage there had been 72 road closures in South Bucks. This had now been reduced to 15. This saved a lot of money, which could be put back into the infrastructure.

·       A staff restructure was also taking place.

·       Ruth Vigor-Hedderly had tried very hard to demolish and rebuild the Service, putting policies and procedures into each depot. This was just the beginning.

Ian Dyson asked who had oversight of the Strategic Client. Ruth Vigor-Hedderly said that she had now appointed Mike Freestone, Gareth Llewelyn and Mike Turney. It was fundamental that they became the intelligent client.

Gill Harding said that the titles were interim, due to Future Shape changes. Mike Freestone was Director of Transport, and they were benefitting from his wealth of experience and knowledge.

A member asked if restructuring would increase the skills shortage. Ruth Vigor-Hedderly said that they were moving to be commercially-minded. Skills levels were very thin on the ground. If they had staff already in post who could grow, they should be doing that. Another big problem was that the salaries were not high enough.

Mike Nottman referred to the reorganisation and restructure and said that a number of senior people were starting the following week. More positive messages were getting out to the market place. Five apprentices were starting that day, as they were trying to grow their own talent.

A member asked how far they had progressed with audit recommendations. Ruth Vigor-Hedderly said that prior to 1 April 2014, she and Gill Harding had not been in post. Members could meet with Mike Nottman, Chris Williams or Neil Gibson.

Gill Harding said that they were trying to learn all the lessons brought out previously. They were very mindful that they did not get lost.

A member asked when they would see the outputs of the current work. The member said that outputs from local depots had improved dramatically. The member also said that the cost of the work being done by Ringway Jacobs appeared to be higher than elsewhere,  ...  view the full minutes text for item 6.

Richard Ambrose referred members to the report on pages 285-7 of the main agenda pack.

Since they had reported to the Committee in April 2014, the monitoring arrangements for the Capital programme had been amended. There was a new report format. The new report distinguished between funds which had been released through the gateway process and those that were included in the programme but are still pending release.

A member noted that the report stated that there might be implications for project managers and asked what that meant. Richard Ambrose said that it could mean increased work.

Ian Dyson asked if the process would be applied retrospectively. Richard Ambrose said that later gates would be used. In the next year there would be fewer of those.

A member referred to the £30m slippage of capital schemes and asked if that would be reported to the Committee. Richard Ambrose said that they could bring that to the Committee – Action: RA. The Gateway process had started after they had approved the capital programme for the current year.

Ian Dyson noted that the Select Committee was routinely monitoring this work, and that if the solutions put in place were not working, the Select Committee should raise the concerns with the Regulatory and Audit Committee.

Resolved:

https://osc.independent.gov.uk/wp-content/uploads/2014/09/Annual-Report-of-the-Chief-Surveillance-Commissioner-for-2013-2014-laid-4-September-2014.pdf

Members noted the Report.

Members noted the Forward Plan.

13 November 2014, 9am, Large Dining Room, Judges Lodgings

13 November 2014, 9am, Large Dining Room, Judges Lodgings

Ian Dyson, Chief Internal Auditor

Ian Dyson referred members to the Internal Audit Progress Report 2014-15.

The Internal Audit Plan was attached as Appendix 1 to the Report.

Ian Dyson told members the following:

·       Three candidates were being interviewed that day for a Senior Auditor post.

·       Recruitment was an issue in the (Internal) Audit sector.

·       There were no completed audits to be reported at this stage. Resources had been prioritised to undertake reactive audit activity.

·       The scope of the audit of AFW Payments to Providers had been extended. Internal Audit had been meeting with senior managers in AFW and in Finance soon to develop an improvement plan. Some weaknesses were not being addressed.

·       There had been an issue in the previous year regarding direct payments. No fraud had been found but Internal Audit had found a poor process. They were just commencing an audit on this now, and predicted that there would be some issues on the control environment.

·       A specialist was coming in to look at the Debt Management Strategy.

·       Progress on the actions coming out of the Ofsted Inspection and the Internal Audit would be brought to the Committee.

·       Two bids had been made to the DCLG for "fraud funding." DCLG had made £16m available. One of the bids was to create an anti-fraud hub to pursue Council tax fraud.

·       There had been an incident of fraud at the Registrar Office (c. £4000). The individual had been prosecuted and awarded a suspended sentence.

A member said that the Cabinet Member for Children’s Services said they had not seen the Audit report. Ian Dyson said that he was surprised to hear that as he understood that the Cabinet Member had seen the Audit Report. Internal Audit did not send Audit Reports directly to members, but to Strategic Directors.

The member said that there was no acknowledgement in the Ofsted Report of changes already being made. Ian Dyson said that it did refer to the fact that managers were already making changes.

A member referred to a statutory letter from the Strategic Director for Children’s Services to the Chief Executive in December 2013. The Leader suggested the letter had come to the Regulatory and Audit Committee. Ian Dyson said that he had not been aware of the letter, and the letter had not come to the Committee.

Members discussed whether the letter should have come to the Committee and what the process should have been, as well as why the letter had not caused the risk register to be updated. Members asked for a report back on this, explaining if the letter should have come to R&A and if so, why it didn’t come - Action: ID

Ian Dyson, Chief Internal Auditor

The Confidential Minutes of the meeting held on 25 June 2014 were agreed and signed as a correct record.