Corporate Governance, Audit and Standards Committee - Tuesday, 27th July, 2021 7.00 pm - Agenda and minutes

To receive an update from the Executive Head of Finance on the Statement of Accounts and Audit Opinion 2019/20.  A representative of Ernst & Young will be joining the meeting for this item.

The Chairman welcomed to the meeting Adrian Balmer (Senior Manager) and Justine Thorpe (Audit Manager) of Ernst & Young (EY) via Microsoft Teams to update the Committee on the Draft Audit Results Report for the financial year ended 31st March 2020. 

Mr Balmer referred to the Executive Summary which stated that the audit had been carried out in accordance with the audit scope for the audit of the 2019/20 financial statements.  As a result of Covid-19, new regulations – the Accounts and Audit (Coronavirus) (Amendment) Regulations 2020 No. 404, had come into force on 30th April 2020.  The Regulations announced a change to the publication date from 31st July to 30th November 2020 for all relevant authorities.  It was noted that 30th November 2020 was not a statutory deadline for the completion of the audit of the Council’s 2019/20 financial statements.

As a result of Covid-19, Mr Balmer gave further details of changes made to EY’s risk assessment in respect of the following:

·              Valuation of investment properties and property plant and equipment

·              Disclosures on Going Concern

·              Adoption of IFRS16

Reference was also made to changes in materiality.  EY had updated its planning materiality assessment using the draft financial statements and had also reconsidered its risk assessment.  Based on its materiality measure of gross expenditure on provision of services, EY had updated its overall materiality assessment to £1.512 million.  The basis for this assessment had remained consistent with prior year at 2% of gross expenditure on the provision of services.  This had resulted in an updated performance materiality of £1.135 million and an updated threshold for reporting mis-statements of £75.6k.

In respect of the status of the audit, the draft Audit Results Report stated that, subject to satisfactory completion of the remaining areas of the audit to be completed, EY expected to issue an unqualified opinion on the Council’s financial statements.  However, it was noted that until the work was complete, further amendments could arise.  Outstanding work included:

·         Property Plant and Equipment and Investment Properties valuation – the provision of source valuation information

·         Going Concern – some final information required from the Council

Mr Balmer referred to the sections in the Executive Summary of the Audit Report concerning control observations and other reporting issues.  It was noted that EY had no other matters to report in respect of the Annual Governance Statement and the National Audit Office Whole of Government Accounts submission.

Once outstanding queries had been answered, EY would review the final position on the concluded work, audit adjustments and reporting (including financial instruments, journals and income).  Together with Council’s management team, the final version of the accounts would be produced and reviewed.  Completion of subsequent events procedures to the date of signing the audit report would also be undertaken. The Committee would also produce a signed management representation letter, with the Chairman and Section 151 delegated to sign this off.

Ms Thorpe drew attention to the area of audit focus in respect of mis-statements due to fraud or error and  ...  view the full minutes text for item 7.

To confirm the Minutes of the Meeting held on 27th May 2001 (copy attached).

The Minutes of the meeting held on 27th May 2021 were approved and signed by the Chairman.

To receive an update from the Executive Head of Finance on progress with the Statement of Accounts 2020/21.

The Executive Head of Finance advised the Committee that work would commence in August 2021 on the 2020/21 financial statements.  EY would be on site to do testing of the financial statements and it was hoped to have an audit opinion by November 2021.

The Committee was referred to the late agenda paper circulated on EY’s ‘Going Concern’ consultation for 2019/20 and the response provided by the Executive Head of Finance, as updated on 22nd July 2021.   

During discussion, the Executive Head of Finance was asked to provide the Committee with a synopsis in respect of the Statement of Accounts for the 2020/21 financial year.

RESOLVED:  That the update be noted.

The Executive Head of Finance to update the Committee on the Annual Governance Statement 2020/21.

The Executive Head of Finance gave an update on progress with the Annual Governance Statement for publication alongside the Council’s Statement of Accounts, under Regulation 6(1) of the Accounts and Audit Regulations 2015.

It was noted that the Regulations required councils to ensure that their financial management was adequate and effective and that there was a sound system of internal control.  This facilitated the effective exercise of the Council’s functions, including the management of risk and review of performance management.   The system of internal control included more than the financial aspects of the Council’s business.  It included matters such as the establishment and monitoring of objectives, the arrangements for decision-making and ensuring compliance with established policies. 

The Committee was advised that recent CIPFA guidance had requested that the Annual Governance Statement should include the Council’s position in respect of continuing services during the Covid-19 pandemic.  In accordance with the Council’s Code of Corporate Governance, assurance statements had been obtained from Heads of Service in this respect.  The Executive Head of Finance confirmed that there were no significant areas of concern given in the assurance statements. 

The Executive Head of Finance undertook to provide the Committee with a synopsis on progress with the Annual Governance Statement. 

RESOLVED:  That the Executive Head of Finance’s update be noted.

To receive an update from the Executive Head of Finance on the Internal Audit Opinion for 2020/21.

The Executive Head of Finance updated the Committee on the Internal Audit Opinion for 2020/21.  It was noted that the Internal Audit Manager, Nikki Hughes, was currently on maternity leave and that an interim Internal Audit Manager (Mr David Thacker) had been appointed. Mr Thacker would commence work at the beginning of August 2021 and would be working closely with the Committee.

The Committee was advised that Nikki Hughes was being consulted to give an opinion on audits outstanding since the start of her maternity leave.   An updated Audit Opinion would be provided to the Committee in due course.

The Executive Head of Finance also updated the Committee on audit resources negotiated with Wokingham Borough Council through a Section 113 agreement.

During discussion, the Executive Head of Finance was asked to provide the Committee with a written synopsis of the situation with regard to the Internal Audit Opinion for 2020/21.

RESOLVED:  That the Executive Head of Finance’s update be noted.

The Head of Democracy and Community to update the Committee on a proposed way forward for the 2021 Rushmoor Community Award. 

The Head of Democracy and Community advised the Committee that the Rushmoor Community Award was an initiative that the Council had had in place for many years to recognise outstanding achievements of Borough residents.    The Award was open to all local people and nominations were sought through advertising in the Arena magazine and though the Council’s social media.  Nominations made had to meet certain criteria: outstanding service to the community; outstanding service to an individual or individuals; or outstanding service to the voluntary sector.

2021 had seen an unprecedented number of nominations received for the Award.  In previous years, between 5-10 nominations were normally received.  However, 32 nominations had been received for 2021 and would require some time to go through by the Committee to make its decision for one, or rarely two, recipients of the Rushmoor Community Award.   It was therefore proposed to set up a small group from the Committee to go through the nominations comprising the Chairman, Vice-Chairman, one representative of the Conservative Group and two representatives of the Labour Group.  All Members of the Committee would receive a strictly confidential list of all nominees in order to make any comments to the Head of Democracy and Community before the small group would meet to make its decision.  It was the intention to present the Rushmoor Community Award for 2021 at the October meeting of the full Council.

During discussion, Members agreed to the proposed way forward and suggested that a set of robust criteria be circulated to the Committee with the information on the nominees to assist with being able to make comments.

RESOLVED:  That the following Members be appointed to the group to consider nominations for the 2021 Rushmoor Community Award and recommend a recipient:

·                Chairman

·                Vice-Chairman

·                Conservative Group representative - Cllr Jacqui Vosper

·                Labour Group representatives – Cllrs Sarah Spall and Ashley Halstead

To consider the Head of Operations Report No. OSP2109, which proposes an amendment to the Scheme of Delegation set out in the Council’s Constitution (taxi and private hire licensing and associated licensing arrangements) to reflect new arrangements required when an authorised officer is minded to refuse or revoke a licence for a private hire operator or a hackney carriage and/or private hire driver.

The Report also proposes the designation of Wheelchair Accessible Vehicles in accordance with the power provided at Section 167 of The Equality Act 2010.

The Committee considered the Head of Operations’ Report No. OSP2109 which proposed an amendment to the Scheme of Delegation set out in the Council’s Constitution (Taxi and private hire licensing and associated licensing arrangements) to reflect new arrangements required when an authorised officer was minded to refuse or revoke a licence for a private hire operator or a hackney carriage and/or private hire driver.   The Report also proposed the designation of Wheelchair accessible vehicles in accordance with the power provided under Section 167 of The Equality Act 2010.

In respect of taxi decision making, the Report advised that the Council’s current  Scheme of Delegation allowed for all decisions on taxi licence applications and any interferences with licences once issued to be made by the Head of Operations or delegated officers.  Historically, these decisions had been made by officers with the option to refer them to a sub-committee, which had been determined by the Manager or Head of Service on an exception basis with no specific criteria.  This had resulted in very few taxi hearings.

DfT statutory guidance had recently been released which required the licensing authority to refer a contentious decision by the authorised officer to a sub-committee.  However, an exception should be specified that delegation to the Head of Operations would remain in place where it was determined urgent or necessary for an expedient decision.

The Report also set out a proposed protocol and procedures for the  arrangements for taxi hearings.  It was proposed that training would be provided for the Committee incorporating mock hearings based on previously determined cases to comply with the DfT guidance to ensure that Members were confident on decision making on taxi hearing cases. 

In respect of wheelchair accessible vehicles, it was proposed that the Council designated wheelchair accessible vehicles in accordance with the power provided at Section 167 of The Equality Act 2010, introducing statutory duties on the drivers of these vehicles.   The DfT guidance recommended that the criteria used to determine that a vehicle was designated was if it would be possible for the user of a ‘reference wheelchair (as detailed in Schedule 1 of The Public Service Vehicle Accessibility Regulations 2000, as appended to the Report) to enter, leave and travel in the passenger compartment in safety and reasonable comfort whilst seated in their wheelchair’.   It was proposed that the responsibility for determining whether a vehicle was designated in accordance with the criteria should be delegated to officers in accordance with the current Scheme of Delegation.  Licensing officers would produce a draft list of vehicles to be designated in accordance with the criteria and that the proprietors/drivers of these vehicles should be informed in writing of the decision to designate the vehicle, the duties that this put on them and additional information to assist them in those duties.  The Report advised the Committee that, as there was a right of appeal to the Magistrate’s Court within 28 days of the decision, the designated vehicles list and duties would be published online  ...  view the full minutes text for item 13.

To receive an update on the appointment of an Independent Member.

The Monitoring Officer reminded Members that, at the meeting on 29th March 2021, the Committee had approved the appointment of Independent Members with technical knowledge and expertise in respect of audit matters to be co-opted on to the Committee to help with the process of in-depth questioning and committee discussion.

A public advertisement to recruit Independent Members had been published  and, following an initial interview of candidates by the Monitoring Officer and the Committee Services Manager, two candidates would be interviewed in August 2021 by the Chairman of the Committee, Chief Executive and the Monitoring Officer. 

The Monitoring Officer undertook to circulate details of the successful candidate(s) following the interviews.

During discussion, Members were advised that the Committee could have up to three Independent Members co-opted on to the Committee.

RESOLVED:  That the update by the Monitoring Officer be noted.