Agenda for Performance and Audit Scrutiny Committee on Thursday 27 May 2021, 5.00 pm

Agenda and minutes

Venue: To be held remotely via video conferencing facilities (Microsoft TeamsLive)

Contact: Christine Brain: Democratic Services Officer (Scrutiny)  Email: christine.brain@westsuffolk.gov.uk

Note: This will be a non-decision making virtual meeting of the Performance and Audit Scrutiny Committee. 

Media

Items
No. Item

47.

Substitutes

Any member who is substituting for another member should so indicate, together with the name of the relevant absent member.

Minutes:

No substitutions were declared.

 

48.

Apologies for absence

Minutes:

Apologies for absence were received from Councillor John Smith.

49.

Minutes pdf icon PDF 141 KB

To review and note any amendments to the minutes of the meeting held on 28 January 2021 (copy attached).

 

Minutes:

The minutes of the meeting held on 28 January 2021 were noted as a correct record and would formally be voted on at its meeting on 29 July 2021.

50.

Declarations of interest

Members are reminded of their responsibility to declare any pecuniary or local non pecuniary interest which they have in any item of business on the agenda no later than when that item is reached and, when appropriate, to leave the meeting prior to discussion and voting on the item.

Minutes:

Members’ declarations of interest are recorded under the item to which the declaration relates.

51.

Public participation

Members of the public who live or work in the district are welcome to speak and may ask one question or make a statement of not more than three minutes duration relating to items to be discussed in Part 1 of the agenda only.  If a question is asked and answered within three minutes, the person who asked the question may ask a supplementary question that arises from the reply.

 

As this meeting is being held virtually and to allow persons sufficient time to be briefed on procedures accordingly, a person who wishes to speak must register by 9am on the last working day before the meeting (Wednesday 26 May 2021).

 

There is an overall limit of 15 minutes for public speaking, which may be extended at the Chair’s discretion.

Minutes:

No members of the public had registered to speak.

 

52.

Ernst and Young - Presentation of External Audit Plan and Fees (2020-2021) pdf icon PDF 136 KB

Report number: PAS/WS/21/005

 

Additional documents:

Minutes:

[Councillor Peter Thompson joined the meeting at 5.07pm during the consideration of this item].

 

The Committees received Report No: PAS/WS/21/005, from EY, the council’s appointed external auditors, who were required to provide an audit plan, attached at Appendix A, which covered the work they planned to perform in order to provide the Council with:

 

-      An opinion on whether the financial statements of the Council gave a true and fair view of the financial position as at 31 March 2021 and of the income and expenditure for the year then ended; and

 

-      A conclusion on the Council’s arrangements to secure economy, efficiency and effectiveness (value for money).

 

Mark Hodgson, Associate Partner from EY presented the report, which summarised EY’s assessment of the key risks which drive the development of an effective audit for the Council and outlined their planned audit strategy in response to those risks.  Officers would be working with EY over the coming months to ensure that these risks were managed and where possible to come to an agreement over their treatment prior to issuing of the Annual Results Report, and Audit Opinion.   

 

He drew Members’ attention to the summary of audit risks set out on pages; pages 15 – 17 relating to new Covid-19 grant income, omission or understatement of NDR appeals provisions; group account consolidation; collection fund accounting and recoverability receivables (bad debt provision); page 18 relating to the materiality level which remained the same as last year at £1.991m and would be updated in July/August 2021 and pages 31 to 33 relating to value for money.  The main change to the value for money conclusion was that EY would only need to report by exception.  

 

It was reported that the Ministry of Housing, Communities and Local Government had put in place the Accounts and Audit (Amendments) Regulations 2021, that extend the statutory deadlines for the accounts relating to the financial years 2020 to 2021, and 2021 to 2022.  Draft accounts needed to be prepared by 31 July instead of 31 May and the publication of the audited accounts moved from 31 July to 30 September.

 

Due to resourcing issues throughout the sector as well as the increased complexity around local authority accounts work, EY would not be in a position to issue the Audit Results Report by the end of September.  Instead, they had set out a provision phasing plan to ensure that they were able to deliver both the 2020 to 2021 statement of accounts work and the housing benefits subsidy work they were responsible for.  It was expected that the Audit Results Report would be presented to the Performance and Audit Scrutiny Committee in November 2021.

 

The Committee considered the report and asked questions to which responses were provided.  In particular members sought clarification on the risks associated with “incorrect capitalisation of revenue expenditure” set out on page 15 of the report and “omission or understatement of NDR appeals provisions” on page 16 to which Mark Hodgson provided responses.

There being no  ...  view the full minutes text for item 52.

53.

Internal Audit Annual Audit Report (2020-2021) pdf icon PDF 120 KB

Report number: PAS/WS/21/006

 

Additional documents:

Minutes:

The Service Manager (Internal Audit) presented Report No: PAS/WS/21/006 which provided members with an overview of the work carried out by Internal Audit for the year ending 31 March 2021.

 

The annual audit opinion, attached at Appendix A to the report, had been split into the four constituent elements of governance, risk, internal control and financial control with a specific conclusion drawn on each area as well as the direction of travel.

 

The council recognised that fraud, theft and corruption were an ever-present threat to the resources available in the public sector.  Appendix B attached to the report demonstrated West Suffolk’s progress in developing and maintaining an anti-fraud and anti-corruption culture and publicised the action taken where fraud or misconduct had been identified.

 

As a result of Covid-19, less ‘direct’ audit assurance work was carried out within the period than would normally be the case.  However, the majority of the priority 1 and some of the priority 2 work included in the approved audit plan were completed as well as other significant work as set out in Appendix A.  In response to a question raised regarding this, the Service Manager (Internal Audit) explained that any audits included within the 2020-21 audit plan, but not completed, had been considered for inclusion in the 2021-22 plan of work and included in that plan of work if this was deemed appropriate, based on a consideration of current risks.

 

The Service Manager (Internal Audit) then drew relevant issues to Members’ attention.  In particular that audit opinions given to individual audits were all either good assurance or reasonable assurance as set out on pages 65 – 66 of Appendix A.

 

The Committee considered the report and asked questions to which responses were provided. 

 

In response to a question raised regarding the reopening of the “high street fund” set out on page 69 of the report, and whether this was the same as the new “welcome back fund”, officers explained that they were not the same and that there were a number of different business funds currently in progress and being discussed with stakeholders.

 

There being no decision required, the Committee noted the Internal Audit Annual Report 2020-2021, attached at Appendix A and the Annual Fraud Report 2020-2021, attached at Appendix B to Report No: PAS/WS/21/006.

 

 

54.

Outline Internal Audit Plan (2021-2022) pdf icon PDF 134 KB

Report number: PAS/WS/21/007

 

 

Additional documents:

Minutes:

The Service Manager (Internal Audit) presented Report No: PAS/WS/21/007, which provided members with a proposed 2021-2022 Audit Plan, attached at Appendix B.  Attached at Appendix A to the report was the covering Internal Audit Plan Report.

 

The proposed Audit Plan was a risk based plan of work for the internal audit team, which took into account the need to produce an annual internal opinion for the council which concludes on the overall adequacy and effectiveness of the council’s framework of governance, risk management and internal control.

 

It was important that the audit plan was flexible and able to adapt to changing risks facing the council, thereby ensuring that audit resources were used where they would add maximum value.  During the year, specific audits might therefore need to be taken out of the plan or added in, according to changing circumstances.

 

The Service Manager (Internal Audit) drew relevant issues to Members’ attention.

 

The Committee considered the report and in particular discussed Brexit and whether this had an impact on audits.  In response the Service Manager (Internal Audit) explained that the council was still working through the implications of Brexit but did not envisage this would have a significant impact on the council’s audit work. 

 

The Committee endorsed the Outline Internal Audit Plan for 2021-2022 for formal adoption at its meeting on 29 July 2021.

 

 

         

 

55.

2020-2021 Performance Report (Quarter 4) pdf icon PDF 370 KB

Report number: PAS/WS/21/008

Additional documents:

Minutes:

The Service Manager (Resources and Performance) presented Report number: PAS/WS/21/008, which set out the impact of Covid-19 and the Quarter 4 performance and financial outturn summary for the year ending 31 March 2021. 

 

The Service Manager (Resources and Performance) set out the key headlines for the outturn position and referred to page 105 of the report, which showed the outturn position for the year 2020-2021.  The position had improved from the previous position reported in Quarter 3. Funding of additional Covid-19 related costs had been achieved through the work of the council, utilising existing budgets, delivery of Covid-19 related initiatives with existing resources and external grants.  This meant the year end position showed these variances to reduce to an overall impact of £1,359,000.  The deficit would be funded largely from the previously agreed use of the in-year 2020 to 2021 New Homes Bonus allocation which was previously allocated to support strategic projects.  The net deficit balance of £159,000 would then be funded from the council’s general fund balance as the council closed the final accounts for 2020-2021.

 

The Service Manager (Resources and Performance) then referred to page 106 of the report, which set out a graphical representation on how Covid-19 had impacted the council over the year.  The second graph showed the council’s income had reduced by £8.6m, with increased costs of £3.6m giving an overall impact of £12.2m on the council’s finances over the year.  The first graph showed how the impact had been mitigated and reduced the overall impact by £159k.  The majority of which had been achieved from central government grants to cover some of the shortfalls and costs incurred, and the use of the New Homes Bonus and in-year efficiencies. 

 

From a financial perspective, the council had spent £31.9m of its capital budget, out of a total of £83.6m for the year on Barley Homes and the Mildenhall Hub projects.  The difference was due to the phasing of some of the capital projects, for example the Western Way Development, which had been carried forward into 2021-2022, and some of the invest for growth funds which had also been carried forward.

 

The earmarked reserves position at the end of the year was £37.6m, which had improved from where the council thought it would be by the end of the year.  This was primarily due to the net under-utilisation of underspends on fleet phasing in terms of what’s spent on vehicle replacements.  As the council had not borrowed externally in the year this had meant the council did not have to fund as much as originally expected.

 

Attached to the Quarter 4 report were a number of appendices which set out in more detail the performance indicators and financial outturn for 2020-2021, as follows:  

 

-      Appendix A: Performance Indicators – Commentary

-      Appendix B: Performance Indicators – Growth

-      Appendix C: Performance Indicators – Families and Communities

-      Appendix D: Performance Indicators – Housing

-      Appendix E: Performance Indicators – Day to Day

-      Appendix F: Income and  ...  view the full minutes text for item 55.

56.

Health and Safety Summary Report 2020-2021 pdf icon PDF 114 KB

Report number: PAS/WS/21/009

Additional documents:

Minutes:

The Service Manager (Health and Safety) presented Report No: PAS/WS/21/009, which summarised the work carried out by the Health and Safety Sub-Committee during 2020-2021.

 

The summary report attached at Appendix A was produced to identify and document West Suffolk Council’s health and safety performance and work carried out during the year to ensure legal compliance.

 

The Committee considered the report and asked questions.  In particular discussions were held on whether incidents and accidents had increased during 2020-2021 due to Covid-19.  In response the Service Manager (Health and Safety) explained that Covid-19 and not had an effect on the reporting of incidents and accidents, which had stayed the same when compared to previous reporting periods.

 

There being no decision required, the Committee noted the Health and Safety Summary Report 2020-2021.

57.

Annual Appointments to the Financial Resilience Sub-Committee and the Health and Safety Sub-Committee pdf icon PDF 149 KB

Report number: PAS/WS/21/010

 

Additional documents:

Minutes:

The Monitoring Officer presented report number: PAS/WS/21/010, which sought annual reappointments to the Financial Resilience Sub-Committee and the Health and Safety Sub- Committee.

 

The Constitution sets out that appointment of members to the Financial Resilience Sub-Committee and the Health and Safety Sub-Committee be undertaken at the first meeting of the Performance and Audit Scrutiny Committee, following Annual Council or following a review of the allocation of seats on committees during the year.

 

Attached at Appendix 1 and Appendix 2 to the report were the terms of  reference for the Financial Resilience Sub-Committee and the Health and Safety Sub-Committee. 

 

The Committee was asked to:

 

1)   Recommend three members and one substitute member from the members of the Performance and Audit Scrutiny Committee to sit on the Financial Resilience Sub-Committee for the remainder of 2021-2022; and

 

2)   Recommend six members and two substitute members from the members of the Performance and Audit Scrutiny Committee to sit on the Health and Safety Sub-Committee for the remainder of 2021-2022; and

 

3)   Note that formal approval of the membership will occur at its meeting on 29 July 2021.

 

In considering the Conservative nominations for the Health and Safety Sub-Committee, the Monitoring Officer agreed to seek members and substitute members, following the meeting, with the Group Leader, which would then be brought back to the Committee on 29 July for formal approval.

 

At the conclusion of the discussions the following nominations were put forward as follows:

 

Financial Resilience Sub-Committee

 

-      Councillors Ian Houlder and Elaine McManus (Conservative Group) wished to continue to serve as full members on the Sub-Committee.

 

-      Councillor Victor Lukaniuk (The Independent Group) wished to continue to serve as a full member on the Sub-Committee

-      Councillor Robert Nobbs (Conservative Group) wished to continue to serve as the substitute on the Sub-Committee.

 

Health and Safety Sub-Committee

 

-      Councillor Cliff Waterman (Labour Group) wished to continue to serve as a full member on the Sub-Committee

 

-      The Monitoring Officer agreed to speak with the Leader of the Independent Group to see if Councillor John Smith wished to continue as a full member.

 

-      Councillor Robert Nobbs (Conservative Group) wished to continue as a full member on the Sub-Committee.  Councillor Elaine McManus wished to sit as a full member on the Sub-Committee to replace Councillor Karen Richardson.  The Monitoring Officer agreed to seek two further full members, following the meeting with the Group Leader.

 

-      The Monitoring Officer agreed to seek one substitute (Conservative Group) and one substitute (Independent Group) following the meeting with the relevant Group Leaders.

 

 

 

58.

Work programme update pdf icon PDF 114 KB

Report number: PAS/WS/21/011

Additional documents:

Minutes:

The Committee received report number: PAS/WS/21/011, which updated members on the current status of its rolling work programme of items for scrutiny during 2021 to 2021 (Appendix 1).

 

There Committee considered the report and there being no decision required, the Committee noted the update.

 

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