Agenda and minutes

To note any substitution of Committee members made in accordance with Council Procedure Rules.

The following substitution had been made in accordance with Council Procedure Rules:

Councillor D.Richardson for Councillor G.Michaelides; and Councillor S.Thusu for Councillor G.Ganney

Apologies for absences were received from Councillor G.Michaelides and Councillor G.Ganney.

To confirm as a correct record the Minutes of the meeting held on 22 March 2021 (previously circulated).

The Minutes of the meeting held on 22 March 2021 were agreed as a correct record and noted by the Chairman.

To note declarations of Members’ disclosable pecuniary interests, non-disclosable pecuniary interests and non-pecuniary interests in respect of items on this agenda.

Councillor S.Thusu declared a non-pecuniary interest as appropriate by virtue of being a Member of Hertfordshire County Council.

Report of the Shared Internal Audit Service asking Members to note the Annual Report.

Report of the Shared Internal Audit Service (SIAS) which detailed the overall financial and non-financial opinion on the adequacy and effectiveness of Welwyn Hatfield Borough Council’s control environment in the year 2020 - 2021.

The following points were raised and discussed:

-       In the report the Head of Assurance confirmed that during the year no matters threatened SIAS’s independence; and that SIAS was not subject to any inappropriate scope or resource. This was confirmed by the Head of Resources

-       Based on the internal audit work undertaken at the Council in 2020/21, SIAS were able to provide a Satisfactory Assurance opinion for both the financial and non-financial aspects of the Council’s control environment. It was noted that whilst ‘Good’ was the top rating, a consistent Satisfactory Assurance opinion was an appropriate level of achievement for the Council and reflected the fact that SIAS and the Council were auditing the right areas, where improvements could be made

-       Internal audit activities in 2020/21 were significantly affected by Covid-19 pandemic

-       Two projects were classified as “Not Assessed”, i.e. no audit assurance opinion was given. These two audits have contributed to the assurance opinion on non-financial systems as they were grant validations / certifications that confirmed the Council complied with the grant conditions

-       A limited assurance opinion was provided in one report, concerning the Building Services Asset Management audit. This was due to one high priority recommendation being raised relating to the introduction of an inspections programme and the need for tighter record keeping. Whilst the issue raised in the audit report was significant, the audit conclusion on its own was insufficient to reduce the overall annual assurance opinion

-       All performance indicator targets had been met except for customer satisfaction.  Members were informed that this was due to one low scoring returned questionnaire (which provided a scoring of 38 out of 65, one point below what is considered ‘satisfactory overall’).  The low scoring questionnaire was due to the amount of officer time drawn upon.  SIAS explained that whilst this was a subjective judgement, the SIAS team had listened to the feedback and would look at improvements that can be made

SIAS thanked the Head of Resources, their team and Officers from across the Council for their positive engagement which allowed for 100% of projects to be completed

RESOLVED

The Committee unanimously agreed to note the SIAS Annual Report.

Report of the Shared Internal Audit Service (SIAS) which provides details on the progress made by SIAS in delivering the Council’s Annual Audit Plan for 2021/22 as at 17 June 2021.

Report of the Shared Internal Audit Service (SIAS) which provided details on the progress made by SIAS in delivering the Council’s Annual Audit Plan for 2021/21 as at 17 June 2021.

The following points were raised and discussed:

-       As previously noted at Audit Committee, different assurance definitions would be used in audit reports from 1 April 2021 in line with CIPFA recommendations

-       6.5 days have been returned to contingency as a of result of the time required for 2020/21 Projects Requiring Completion being less than originally anticipated during the setting of the 2021/22 plan

-       One high priority recommendation has been raised since SIAS’s previous report to the Committee. This concerns to the area of Building Services Asset Management, with the recommendation relating to condition surveys and inspections. A follow up audit has been planned to review progress against the recommendation during June and July 2021, with a management update included in the progress report at Appendix C.  Members also noted that  Building Services – Regulatory Compliance audit report was completed at the same time and received a Satisfactory assurance rating

-       Performance indicators reflected that good start made by the internal audit programme for 2021/22

-       The Housing Maintenance Contract Procurement – Continuous Assurance project will be undertaken throughout the year

Report of the Head of Resources to provide a verbal update on the Statement of Accounts 2020/21.

Report of the Head of Resources and Section 151 Officer informing Members of the delay to the 2020/21 Statement of Accounts. Due to the impact on external auditing activities of local authorities, caused by the Covid-19 pandemic and recommendations following the Redmond Review into the effectiveness of external audit and transparency of financial reporting in local authorities, EY have informed the Council of their decision to postpone the audits of district and borough councils to allow them to focus on county council and London borough audits. EY proposed to return to audit district and borough councils in October.

The Head of Resources informed Members that through the hard work and dedication of the Finance Team, the Council had already published the Council’s pre-audit accounts for 2020/21. The councils would be required to publish audited accounts by the 30 September 2021 and in the absence of doing so, would be required to publish a notice explaining why the audit accounts have not been published.

Report of the Chief Executive which presents the draft Annual Governance Statement for the financial year 2020/21.

Members received a report of the Chief Executive presenting the Draft Annual Governance Statement (AGS) for the financial year 2020/21.

The following key points were noted:

-        The Draft AGS was compiled by the Corporate Governance Group in accordance with best practice set out in the CIPFA/SOLACE Guidance Framework “Delivering Good Governance in Local Government”

-        The Draft AGS had been reviewed by the Standards Committee who approved the Draft Annual Governance Statement for onward submission to the Audit Committee

-        The draft statement reflected the impact and changes made due to the Covid-19 pandemic.  The financial impact had  come from both increased costs and demand for services, as well as reduced income. In addition a number of services have had to adapt to remote and Covid safe working practices, especially when engaging with the public and other key stakeholders

-        A number of changes to the governance arrangements of the Council had been required, including moving to virtual council meetings. Members noted that the council had moved quickly and effectively to holding virtual meetings

-        During 2020/21 the Council had continued its modernisation programme and this had included implementing new scrutiny arrangements and adopting the LGA’s Model Code of Conduct

-        Officers had also assessed the Council’s governance arrangements against CIPFA’s new Financial Management Code. Whilst the council met the standards set out in the Code a number of areas had already been identified where improvements could be made and these had been included in the Action Plan going forward

-        Further planned improvements and changes had been agreed by the Corporate Governance Group and were outlined in the Action Plan in section five of the draft statement

RESOLVED:

The Audit Committee unanimously

(a)   approved the Draft Annual Governance Statement;

(b)   authorised the Chief Executive, in conjunction with the Leader of the Council, to make any subsequent amendments to the Draft Annual Governance Statement necessitated by the comments made by the Audit Committee

(c)   recommended its certification by the Leader of the Council and the Chief Executive