Agenda and draft minutes

SWT Audit and Governance Committee
Monday, 13th December, 2021 6.15 pm

Venue: The John Meikle Room - The Deane House. View directions

Contact: Email: governance@somersetwestandtaunton.gov.uk 

Webcast: View the webcast

Items
No. Item

41.

Apologies

    To receive any apologies for absence.

    Additional documents:

    Minutes:

    Apologies were received from councillor Dawn Johnson who was substituted by councillor Tom Deakin substituted.  

     

    Councillor Ross Henley, who was due to present reports to the Committee, also gave apologies as a road closure had prevented him from attending the meeting in person and he instead joined the meeting via Zoom.

     

42.

Minutes of the previous meetings of the Audit and Governance Committee pdf icon PDF 215 KB

43.

Declarations of Interest

    To receive and note any declarations of disclosable pecuniary or prejudicial or personal interests in respect of any matters included on the agenda for consideration at this meeting.

    (The personal interests of Councillors and Clerks of Somerset County Council, Town or Parish Councils and other Local Authorities will automatically be recorded in the minutes.)

    Additional documents:

    Minutes:

    Members present at the meeting declared the following personal interests in their capacity as a Councillor or Clerk of a County, Town or Parish Council or any other Local Authority:-

     

    Name

    Minute No.

    Description of Interest

    Reason

    Action Taken

    Cllr L Baker

    All Items

    Cheddon Fitzpaine & Taunton Charter Trustee

    Personal

    Spoke and Voted

    Cllr S Coles

    All Items

    SCC & Taunton Charter Trustee

    Personal

    Spoke and Voted

    Cllr H Davies

    All Items

    SCC

    Personal

    Spoke and Voted

    Cllr T Deakin

    All Items

    Taunton Charter Trustee

    Personal

    Spoke and Voted

    Cllr L Lisgo

    All Items

    Taunton Charter Trustee

    Personal

    Spoke

    Cllr J Lloyd

    All Items

    Wellington & Sampford Arundel

    Personal

    Spoke and Voted

    Cllr T Venner

    All Items

    Minehead

    Personal

    Spoke and Voted

    Cllr B Weston

    All Items

    Taunton Charter Trustee

    Personal

    Spoke

     

44.

Public Participation

    The Chair to advise the Committee of any items on which members of the public have requested to speak and advise those members of the public present of the details of the Council’s public participation scheme.

     

    For those members of the public who have submitted any questions or statements, please note, a three minute time limit applies to each speaker and you will be asked to speak before Councillors debate the issue.

     

    Temporary measures during the Coronavirus Pandemic

    Due to the temporary legislation (within the Coronavirus Act 2020, which allowed for use of virtual meetings) coming to an end on 6 May 2021, the council’s committee meetings will now take place in the office buildings within the John Meikle Meeting Room at the Deane House, Belvedere Road, Taunton. Unfortunately due to capacity requirements, the Chamber at West Somerset House is not able to be used at this current moment.  

     

    Following the Government guidance on measures to reduce the transmission of coronavirus (COVID-19), the council meeting rooms will have very limited capacity.  With this in mind, we will only be allowing those members of the public who have registered to speak to attend the meetings in person in the office buildings, if they wish (we will still be offering to those members of the public that are not comfortable in attending, for their statements to be read out by a Governance and Democracy Case Manager).  Please can we urge all members of the public who are only interested in listening to the debate to view our live webcasts from the safety of their own home to help prevent the transmission of coronavirus (COVID-19). 

    Additional documents:

    Minutes:

    No members of the public had requested to speak on any item on the agenda.

45.

Audit and Governance Committee Forward Plan pdf icon PDF 105 KB

46.

External Auditor's Annual Report 2020/21 pdf icon PDF 225 KB

    This short covering report introduces the second stage of annual reporting by our External Auditor, Grant Thornton UK LLP, following completion of the Statement of Accounts for 2020/21.  The Auditor’s report, attached as Appendix 1, is comprehensive and primarily details the Auditor’s findings on arrangements in place at SWTC to secure Value for Money.  It reports on whether all aspects of the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

    The Auditor’s report includes a summary of findings and a hierarchy of recommendations to the Council which, in turn, are accompanied by the Council’s management comments.  The Auditor will present the report verbally at this meeting of the Committee.

     

    Additional documents:

    Minutes:

    The Portfolio Holder for Corporate Resources introduced the report:  

    ·                     The Council successfully published audited accounts on time this year and was one of only 9% of councils to do so this year.  

    ·                     The next stage of the external auditor’s work would be to review value for money. This has taken on a higher profile in the audit regulations and impacts all councils.  

    ·                     The Auditor’s report did not include any statutory recommendations but it did include one key recommendation and five improvement recommendations for the committee to consider.  

     

    The Corporate Finance Manager provided a further introduction to the report:  

    ·         The report sets out the findings of the External Auditors report on financial sustainability, governance and improving economy, efficiency and effectiveness. These were all reviewed at a high level across the Council.  

    ·         The recommendations for the committee to consider were to note the report, note and endorse the management responses that are set out by the recommendations as management comments and to note the signing off and publication of the Statement of accounts for the year ended 31st March 2021. 

     

    Jackson Murray, Director - Grant Thorton introduced the report and raised the below points:  

    ·         This was the first time this committee will have seen an audit in this format as the Audit Code of Practice had changed meaning an opinion of value for money was no longer received but rather a commentary on value for money instead which was more detailed.  

    ·         The Executive Summary set out the risk assessment and the findings against the financial sustainability, governance and improving economy, efficiency and effectiveness 

    ·         The impact of Covid 19 is reflected throughout the report.  

    ·         There were some improvement recommendations identified regarding the financial sustainability criteria and theimproving economy, efficiency and effectiveness criteria  

    ·         There was a key recommendation made in respect of the governance criteria and that centred on the commercial investment strategy of the Council.  

    ·         For financial sustainability criteria satisfied that there are appropriate arrangements to achieve financial resilience. The Council was still fairly young but the medium-term financial planning had been considered and deemed reasonable. The improvement recommendations made relate to the production of budget books to provide further information and around the information supplied to members when approving capital carry forwards.  

    ·         Regarding governance the key recommendation is around the governance for the commercial investment strategy. Grant Thornton had not concluded that the Council was undertaking any unlawful activity but had concluded that the strategy represented a departure from prudent activity considering government guidance through the CIPFA prudential code.  

    ·         The commercial investment activity did raise financial risks to the council. This report did not say that any unlawful activity has occurred, nor did it say that those risks had materialised as to date they had not. However, decisions taken have led to the Council being exposed to risk.  

    ·         There have been a number of changes and improvements to governance arrangements over the last year and an ambitious Annual Governance Statement and Action Plan had been produced. It was  ...  view the full minutes text for item 46.

47.

SWAP Internal Audit – Progress Report 2021-22 pdf icon PDF 303 KB

    The Internal Audit function plays a central role in corporate governance by providing assurance to the Audit, Governance and Standards Committee, looking over financial controls and checking on the probity of the organisation.

     

    The 2021-22 Annual Internal Audit Plan is to provide independent and objective assurance on SWT Internal Control Environment. This work will support the Annual Governance Statement.

     

    Additional documents:

    Minutes:

    Alastair Woodland, Assistant Director – SWAP provided an introduction to the report: 

    ·                     The report provided an update on the Audit Plan progress and updated on any significant findings from work completed so far as well as any changes to the Audit Plan.  

    ·                     One limited assurance audit on data centres. A couple framework reviews were carried out around risk management and performance. These are crucial governance areas; a good level of assurance was given for both. The fraud risk assessment would be shared with the Committee in due course.  

    ·                     Regarding the data centres audit, the data centres had recently been refurbished and some aspects to support their safe operation were still being embedded. These recommendations and actions would be added to the tracker. There would be a follow up on this audit to ensure the recommendations were implemented.  

    ·                     For the procurement audit, which previously had limited assurance, a number of the recommendations were materially complete, but some final aspects needed to be implemented before they were complete.  

    ·                     The Committee were updated that one of the actions recorded as Priority 2 in the report was actually a Priority 3 action.   

    ·                     There had been follow up work on the grounds and maintenance audit. All actions and recommendations had now been completed.  

    ·                     There had been some changes to the audit forward plan which was a rolling plan. The data centre audit was brought forward. The ICT infrastructure review had been replaced by a management review may not be undertaken ahead of unitary.  

    ·                     Overall, the governance risk control was working relatively effectively, though, there were some areas for improvement.  

     

    During the debate the following points were raised: 

    ·                     It was questioned about the location of the data centres. The SWAP Assistant Director responded that the major data centre was at Deane House, with a more minor one at West Somerset House.  

    ·                     It was asked about financial training not having been given to DLO staff when this was recommended previously. It was responded by the SWAP Assistant Director that the way of working and processes had changed meaning that there was less of a need for the training.  

    ·                     Concerns were raised about the delay to the GDPR audit and about health and safety only having limited compliance. The SWAP Assistant Director responded that the GDPR audit had been delayed but it was hoped the review would be completed in the next four weeks. The health and safety audit would be followed up in the new year. Senior management were looking to implement improvements as soon as possible.  

    ·                     Concerns were raised about GDPR and ensuring that measures are in place. It was responded by officers that specialist advice was being taken to ensure that GDPR was addressed well.  

    ·                     It was asked how internal audit would rate the Council’s ability to defend against cyber-attacks given the data centre having limited assurance. It was responded by the SWAP Assistant Director that a separate review on cyber security had been undertaken. The data centre was more about  ...  view the full minutes text for item 47.

48.

Summary of Level 1 and 2 Audit Actions Progress pdf icon PDF 251 KB

    The purpose of this report is to update the Committee on progress against level 1 and 2 Internal Audit Actions as at the end of October 2021.

     

    Additional documents:

    Minutes:

    The Business Intelligence and Performance Manager introduced the report; 

    ·                     Purpose of the report was to update on the level 1 and 2 audit actions at the end of October.  

    ·                     There was one audit report where all the priority 1 and 2 actions had been completed since the last update to the Committee.  

    ·                     Three audit actions had been completed since the last update in September. There were four audit actions overdue as at the end of October. 

    ·                     Actions had a RAG status of Red, Amber or Green to show progress on each of them.  

     

    During the debate the following points were raised: 

    ·                     It was asked what progress had been made with the health and safety action on members being involved in a new Health and Safety Committee. Officers responded that the Health and Safety Committee was made up of a combination of staff and UNISON members and that councillors were not expected to sit on the Health and Safety Committee.  

     

    The Committee resolved to note the recommendation in the report:  

    2.1 The Committee reviews the overdue actions contained in the report and notes progress to date. 

     

49.

Treasury Management 2021/22 Mid-Year Report pdf icon PDF 889 KB

    To provide Members with an update on the Treasury Management activity of Somerset West and Taunton Council and performance against the Prudential Indicators in respect of the first six months of 2021/22.

    Additional documents:

    Minutes:

    The Corporate Finance Manager provided an introduction to the report:  

    ·                     The CIPFA Code and Treasury Management Code were important for local authorities to follow. They required the Council to have a regular reporting structure on Treasury Management. There were forthcoming changes to these codes which were being initiated by the Department for Levelling Up, Housing and Communities. The government was becoming increasingly concerned about local authorities borrowing and investing in properties to generate yield.  

    ·                     The report set out details on the Council’s borrowing, investments and current performance against treasury and prudential indicators. Figures were all in line with indicators. 

    ·                     The Council’s bank account had exceeded the limit placed on it several times within the financial year. The limit was currently £600,000 and was put in place during the financial crisis. One of the recommendations of the report was that the Committee recommend to Full Council to increase this limit to £1.2m to prevent the limit being exceeded. This recommendation was supported by the Council’s financial advisors.  

     

    During the debate the following points were raised:  

    ·                     It was asked if the bank had agreed to increase the threshold to £1.2m and whether this would cost more to do. Officers responded that was an internal set limit and control mechanism so was not to do with the bank and so would not cost any more.  

    ·                     It was asked if the new £1.2m limit was only to stop the limit being exceeded when money was paid in late rather than it being an aim to hold more money in the bank account. Officers confirmed this was correct. 

    ·                     It was asked about paying off loans early. Officers responded that paying off loans early would result in penalty charges.  

    ·                     It was asked if borrowing for less than 12 months was defined as short-term and borrowing for longer than 12 months was defined as long-term borrowing. Officers confirmed that was correct. 

     

    The Committee resolved to note the recommendations in the report:  

    2.1 To note the Treasury Management position as at 30th September 2021 and compliance with the Prudential Indicators.  

    2.2 To recommend to Full Council that an amendment (effective forthwith) be made to paragraph 5.16 of the Treasury Management Strategy, which was approved on 30 March 2021 as part of the report covering the Council’s Capital, Investment and Treasury Strategies 2021/22 to 2025/26 (details of the amendment are set out in paragraph 6.56 of this report).  

     

50.

External Auditor Appointment Procurement Process pdf icon PDF 263 KB

    This report sets out proposals for appointing the external auditor to the Council for the accounts for the five-year period from 2023/24.

     

    Additional documents:

    Minutes:

    The Section 151 Officer introduced the report: 

    ·         The decision to opt in for external auditor appointment had to be made within a certain time period which was ahead of the new unitary authority being formed. Opting in must be done by resolution of Full Council by March 2022. It had been discussed with each of the other district councils and Somerset County Council’s Section 151 officers and had been agreed that all existing authorities should submit to the PSSA and opt in for external auditor appointment. Officers had agreed that this was the most effective way to provide for the opportunity for the appointment of the external auditors for the new authority.  

     

    The Committee resolved to note the recommendations in the report:  

    2.1 The Council accepts Public Sector Audit Appointments’ invitation to opt into the sector led option for the appointment of external auditors to principal local government and police bodies for five financial years from 1 April 2023.  

    2.2 Delegate authority to the S151 Officer to sign the Notice of Acceptance of the invitation to opt in.  

    2.3 The Council notes that newly established local government bodies have the right to opt into PSAA’s scheme under Regulation 10 of the Appointing Person Regulations 2015, which will enable the new unitary council (or its Shadow Council) to consider opting in to PSAA scheme or making alternative arrangements when legally constituted. 

     

51.

Health and Safety Management System – Performance Framework and Improvement Programme pdf icon PDF 371 KB

    The purpose of this report is to provide the Audit and Governance committee with:

    A)  an introduction to the Health and Safety (H & S) Performance Framework – the approach for how the Audit and Governance Committee will be kept updated on Health and Safety (H & S) Performance, and

    B)   an introduction to, and progress against delivery of the H & S Management System (HSMS) Improvement Programme.

     

    Additional documents:

    Minutes:

    The Assistant Director for Corporate introduced the report: 

    ·                     It was raised that a number of improvements needed to health and safety had been identified by internal and external audits. Limited assurance was given by the recent internal audit report. Health and safety posed a significant corporate risk. Officers had worked to implement a clear governance strategy for health and safety. 

    ·                     The first tier of governance was the Council’s senior management team and councillors through the reports brought to the Audit and Governance Committee. The second tier was the corporate tier internally which was a tactical tier designed to capture and deliver actions. The third tier was an operational tier at the directorate level where each directorate sought to implement actions.  

    ·                     There was a new health and safety scorecard with indicators to illustrate progress. Risk management and risk assessments were also being improved.  

    ·                     It was raised that activity on Health and Safety had been separated into seven workstreams. Governance and Control was one of the workstreams. There were also workstreams on people, policy, contractor management, design management, business as usual health and safety and health and safety support systems.  

    ·                     The new programme on health and safety had been running for a month and around eighty actions had been identified.  

    ·                     The programme brief outlined the aims for strategic delivery and benefits. These included minimising and avoiding further accidents and incidents.  

     

    During the debate the following points were raised: 

    ·                     Information was going to be extracted from systems and it was asked if as part of this the organisation would be divided into different risk categories and whether areas of work would be graded in terms of health and safety. Officers responded that areas would be given a RAG (Red, Amber, Green) status to prioritise the key areas of highest potential risk which would be addressed first.  

    ·                     Continued reporting on Health and Safety was encouraged.  

     

    The committee resolved to note the recommendations: 

    2.1 The committee is asked to note and endorse:  

    A) the H & S Performance Framework  

    B) the HSMS Improvement Programme - as the approach to improving the Health & Safety Management System and culture 

     

52.

Changes to the Constitution pdf icon PDF 355 KB

    The matters set out in this report amount to modest changes to the SWT Constitution. This is to achieve, better clarity, the updating of minor changes and procedural refinement. This will ease the interpretation and effectiveness of the Constitution.

     

    Additional documents:

    Minutes:

    The Governance Specialist introduced the report: 

    ·                     It was raised that the purpose of this report was to update some of the wording and job titles in the Constitution to ensure the Council can work effectively and carry out its functions. The report had been drafted with the two deputy monitoring officers and with the involvement of officers from other areas within the Council such as planning.  

    ·                     The changes included the threshold for key decisions being reduced to £500,000. 

    ·                     The updates to the terms of reference of the Planning Committee included the insertion of the planning phosphates sub-committee into the constitution.  

    ·                     The Council Procedure Rules had been updated with changes around procedures for substitutions and motions.  

    ·                     Regulations and procedures for petitions, including e-petitions, had also been added. The report sought to amend the threshold for the number of signatures on a petition to be 1600 signatures, an increase from the current 200 signatures required, to align more closely with the surrounding districts.  

    ·                     The reason for decreasing the key decision threshold was likewise to align with surrounding local authorities.  

    ·                     It was proposed that there be some changes to the Contract and Financial Procedure Rules which reflected the legislation changes as a result of leaving the European Union.  

    ·                     The Chairs of Scrutiny were briefed on the report this morning. 

    ·                     The report would proceed to Full Council in February.   

     

    During the debate the following points were raised: 

    ·                     Regarding the planning committee terms of reference and the criteria for a planning application being controversial, it was suggested that changing the need to have four individuals and also a member of one of the subsequent local authorities support the objection be changed so that the member was needed but more individuals, perhaps twelve, be needed to support the objection.  

    ·                     It was suggested that for planning applications having a ward member or parish councillor and four individuals where it was contrary to the officer's recommendation worked well and that increasing the number needed to support above four would likely result in very few objections being brought to the Planning Committee by that method. Officers noted that in the next four months there would be a need to look at adding a section on planning to the new authority's constitution. The existing authorities would need to create this. Any further changes could therefore be looked at as part of that drafting process. 

    ·                     A query was raised in relation to motions to Council and a motion previously made at Full Council. It was responded by officers that there would be a further discussion in the new year regarding how the proposed amendments to motions would have impacted previous events. This would be through a meeting with the group leaders and alternative amendment options would also be discussed.  

    ·                     It was raised that inevitably as local government reorganisation moved towards the new unitary authority being formed, a county wide local plan would be needed and there would need to be a common set of standards created.  

    ·                     It  ...  view the full minutes text for item 52.