Agenda and draft minutes

The Committee is asked to note any apologies for absence and substitutions received from Members.

An apology for absence was received from Councillor Platt (with Councillor Alexander substituting).

To confirm and sign as a correct record, the minutes of the last meeting of the Committee, held on Thursday 25 January 2024.

It was RESOLVED that the Minutes of the last meeting of the Committee held on Thursday 25 January 2024 be approved as a correct record and be signed by the Chairman.

Councillors are invited to declare any Disclosable Pecuniary Interests, Other Registerable Interests of Non-Registerable Interests, and the nature of it, in relation to any item on the agenda.

There were no declarations of interest made on this occasion.

Subject to providing two working days’ notice, a Member of the Committee may ask the Chairman of the Committee a question on any matter in relation to which the Council has powers or duties which affect the Tendring District and which falls within the terms of reference of the Committee.

No Questions on Notice pursuant to the provisions of Council Procedure Rule 38 had been submitted on this occasion.

To present to the Committee the progress on outstanding actions identified by the Committee along with general updates on other issues that fall within the responsibilities of the Committee.

Members heard an oral update  from one of the Council’s external auditors (BDO). The update provided, highlighted that the position regarding audits remained largely unchanged since the last committee meeting. However, a significant development  had been the consultation issued by the Department for Levelling Up, Housing and Communities (DLUHC) on February 8^th 2024 concerning steps to address backlogs in the local government audit market. Although the consultation had closed in early March, final proposals from the Government were still awaited, with expectations that they would align closely with the consultation. Those proposals were likely to introduce a statutory backstop date of September 30th, 2024, for completing audits up to the 2022/23 financial year. While the completion of the 2021 audit was feasible, the inability to complete audits for 2021/22 and 22/23 would have necessitated disclaiming audit opinions on those financial statements. Work over the summer would have been required to issue disclaimed audit reports and report on the 2021 financial statements. Additionally, auditors were expected to undertake a single piece of value-for-money work covering all open years up to, and including, 2022/23, as per the consultation. Although final decisions were pending, this summary outlined the current understanding of the situation pending the Government's final proposals.

The report before the Committee outlined that the Table of Outstanding Issues  had been reviewed and updated since it  had last been  considered by the Committee in January 2024.

There were two main elements to this report as follows:

1.    Updates against general items raised by the Committee

2.    Updates against the 2023 Annual Governance Statement Action Plan

In terms of Item 1 above, there were no significant issues to raise, with actions remaining in progress or further details as set out below. In terms of Item 2, this set out the latest Annual Governance Statement published as part of the Council’s Statement of Accounts for 2022/23 on 1 August 2023. Activity remained in progress against the various items, which were reported to Members as part of this report going forward.

Outstanding actions – further details along with other issues identified

Continuing External Audit delays and an update on the External Auditor’s work on the Council’s Statement of Accounts 2020/21

Members heard that, in terms of the Government’s proposed response to the ongoing audit delays, they had undertaken a further consultation exercise across a number of issues including the proposed statutory backstop dates. At the current time, the Government was analysing the feedback from the consultation and it was hoped that they would publish their response shortly.

The East of England Local Government Association (EELGA) Housing Review

As Members were aware, there were changes happening within the Local Government Social Housing arena. The Regulator for Social Housing had had its power enhanced, under the Social Housing (Regulation) Act 2023, and this had resulted in Local Authorities, from 1 April 2024, becoming part of the regulated social housing regime.

Members also heard that, as part of this process, the Regulator had introduced new consumer standards  ...  view the full minutes text for item 28.

To provide a progress report on the Internal Audit function for the period January 2024 – March 2024 and to seek approval of the Audit Committee for the 2024/25 Internal Audit Plan.

The Committee was reminded that the Accounts and Audit Regulations 2015 required that: “a relevant authority must undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance processes, taking into account public sector internal auditing standards or guidance”.

In respect of the Internal Audit Plan the Public Sector Internal Audit Standards required the Internal Audit Manager to: -

·         Establish a risk based Internal Audit Plan, at least annually, to determine the priorities of the Internal Audit function, consistent with the Council’s goals.

·         Has in place a mechanism to review and adjust the plan, as necessary, in response to changes to the Council’s business, risks, operations, programmes, systems and controls.

·         Produces a plan that takes into account the need to produce an annual Internal Audit opinion.

·         Considers the input of senior management and the Audit Committee in producing the plan.

·         Assesses the Internal Audit resource requirements.

The Committee heard that a total of four audits had been completed since the previous update in January 2024. Six audits were still in fieldwork. A request was made to the Audit Committee to defer four audits from the 2023/24 audit plan. Those audits were the Social Housing Bill Implementation Plan, External Funding, Emerging Risks from Legislative Changes, and Careline Service – Follow Up. All audits equated to a total of 40 audit days.

It was reported that the Internal Audit Manager continually risk assessed the progress of the plan against the level of resources available throughout the year to determine whether a measured annual assurance opinion could be provided based on the level of work completed. A determination was then made as to whether audit days needed to be procured to support the delivery of the plan. Although there were some audits to be deferred, they were not auditable areas that would have a significant impact on the Council’s overall assurance framework.

Throughout the year, the audit team had had a number of long-term absences which were covered through the use of overtime as it was the most practical and cost-effective method to ensure adequate coverage at the time. If there was a need for additional coverage in the future, then the Audit Committee would be updated accordingly through the periodic update arrangements in place. In order to provide the Head of Internal Audit’s Annual Opinion at the June 2024 Audit Committee, it was important that the following audits were completed as they formed part of the Council's key systems. The audits were Procurement, Contract Management, Project Management, and IT Governance. All were currently in fieldwork and close to completion.

Quality Assurance

The Internal Audit function issued satisfaction surveys for each audit completed. All satisfaction surveys were yet to be returned from the four audits completed in this period.

Resourcing

Internal Audit currently had an establishment of 4 FTE posts with access to a third-party provider of Internal Audit Services for specialist audit days as and when required. IA currently had an Audit Technician post vacant. The team  ...  view the full minutes text for item 29.

To present for consideration the External Auditor’s Draft Audit Plan and Strategy for the year ending 31 March 2024.

Members heard that shortly after the end of each financial year, the Council prepared, in accordance with proper practices, a Statement of Accounts as statutorily required, which was then subject to external audit before final publication. The publication deadline for the unaudited accounts was the end of May each year.

As previously discussed, in response to the ongoing external delays, the Government had undertaken a number of consultation exercises. Although subject to the outcome of the most recent consultation exercises, the Government was expected to continue with their aim of introducing statutory ‘backstop’ dates by which time audited accounts must be published. Based on the Government’s latest consultation (with the outcomes yet to be published), their plan was based on a three-stage approach (1. ‘Reset’, 2. ‘Recovery’, and 3. ‘Reform’) which would see ‘backstop’ dates phased in over the period from 2023/24 through to the accounts for 2027/28. In terms of the statutory ‘backstop’ date for the 2023/24 accounts, this was currently proposed as 31 May 2025.

The Audit Plan and Strategy issued by the External Auditor highlighted at a summary level, aspects of the work they planned on undertaking and why, areas of focus including where risks were likely to be greater and the background to their required value for money activities.

The outcome of the External Auditor’s work would be set out in a separate report that would be presented to the Audit Committee at a future meeting, within the proposed timescales associated with the ‘backstop’ dates highlighted earlier.

After a short debate it was moved by Councillor Sudra, seconded by Councillor Steady, and RESOLVED that the External Auditor’s Draft Audit Plan and Strategy for the year ending 31 March 2024, be noted.

To present for approval the Audit Committee’s proposed work programme covering the period April 2024 to March 2025.

The Members heard how the Audit Committee had a wide-ranging area of responsibility with statutory and regulatory functions making up a significant element of their work. The meetings of the Committee were scheduled around a quarterly basis subject to the work required of the Committee to support the statutory and regulatory timescales and deadlines. The Audit Committee’s work programme therefore needed to take account of various demands while balancing a number of activities within the planned number of meetings scheduled for the year.

In addition to the regulatory and statutory activities undertaken by the Committee such as the Statement of Accounts, Corporate Governance, and Risk Management, the Committee was also required to review and scrutinize:

• The work and performance of the Internal Audit function

• The outcomes from the work of the Council’s External Auditor

• Progress against audit recommendations and other items identified by the Committee

Members also heard that, in addition to the items set out in report, a number of additional items were presented to the Audit Committee during the year in consultation with the Chairman. Given the ongoing external audit delay, it was difficult at the present time to formally program these in as they were largely reliant on the timing of the associated information being made available to the Council, but a summary was set out below:

• External Audit Certification of Claims and Returns

• External Audit Results Report (associated with the Council’s Statement of Accounts and Annual Governance Statement)

• External Audit plans

During the year other matters apart from those set out above might  be presented to the Committee for consideration, for example, the outcome from regulatory reviews or other external inspections. Given the ongoing regulatory and statutory workload and the various additional activities undertaken by the Committee, any additional items that might have arisen would have needed to be considered against the proposed work programme and included for reporting at the appropriate meeting or considered for inclusion in subsequent work programmes.

After a brief discussion it was moved by Councillor Fairley, seconded by Councillor Alexander and RESOLVED that the Audit Committee approved its Work Programme for 2024/25.

To present to the Audit Committee the updated Corporate Risk Register.

The Committee heard how the register underwent the review process with some highlights as follows.

The Council continued to deal with issues relating to Corporate IT and was committed to ensuring users were not put at risk of cyber-attack. Staff continued to conduct online training, which formed part of the Council’s induction training protocols.

Tendring Council had commenced a review of the Local Plan, in line with the agreement of the Planning Policy and Local Plan Committee. This review was focused on updating the current plan, and not rewriting it. There were guiding principles that had to be followed during this process. This document  needed to be passed to the Secretary of State by the current deadline - June 2025. Tendring Council intended to produce the document before expected changes took effect.

Regarding the Garden Communities project, a development plan was being created through partnerships between Tendring, Colchester, and Essex, which set out a more detailed framework for the layout and delivery of the proposed garden community. This had already been subject to public consultation and had been submitted to the Secretary of State to begin the process of independent examination. A Planning Inspector had been appointed to conduct the examination, which would take place in May 2024.

The changes to the Corporate Risk Register set out in this report reflected minor changes undertaken since the Committee had last considered the register in July 2023. It provided updates, where needed, and revised changing deadlines.

Item 2d - Ineffective delivery of Transforming Tendring project - was considered for removal as this project had now been completed.

The table below set out all amendments to the Risk Register since it was last considered by the Committee in July 2023.

The Committee is asked to consider passing the following resolution:

“That under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during the consideration of Agenda Item 11 on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 7 of Part 1 of Schedule 12A, as amended, of the Act.”

It was moved by Councillor Sudra, seconded by Councillor Fairley and:-

RESOLVED that, under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during the consideration of Agenda Item 11 on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 7 of Part 1 of Schedule 12A, as amended, of the Act.

To seek the necessary annual approval of the Council’s Risk Based Verification Policy.

It was moved by Councillor Sudra, seconded by Councillor Fairley, and:-

RESOLVED that following the annual review for 2024, the Risk Based Verification Policy be approved.