Apologies were received from Cllr Claire Simmons.

Any member of the Council who has a disclosable pecuniary interest in a matter to be considered at the meeting is reminded to disclose the interest to the meeting and to leave the Chamber while any discussion or vote on the matter takes place.

Members are also reminded that if they have any other significant interest in a matter to be considered at the meeting, which they feel should be declared in the public interest, such interests should be declared to the meeting. In such circumstances Members should consider whether their continued participation, in the matter relating to the interest, would be reasonable in the circumstances, particularly if the interest may give rise to a perception of a conflict of interests, or whether they should leave the Chamber while any discussion or vote on the matter takes place.

No declarations of interest were made.

The minutes of the Meeting held on 22 July 2024 are submitted for confirmation.

The minutes of the meeting held on 22 July 2024 were confirmed as a correct record.

On 4^th September 2024, the Grenfell Tower Inquiry published the findings of Phase 2 of its inquiry. The Council accepted the findings in full. The report was commissioned to ascertain the implications for the Council. The Phase 2 Report discussed risk management and the assurance processes management.

The Chair invited Maxine Holdsworth, Chief Executive of the Council, to present the report to Committee who;

1. Disclosed that the Phase 2 Report made recommendations in relation to the Tenant Management Organisation (TMO). Following consultation with tenants in 2018, the Council took over responsibility for housing management following and the relevant recommendations in relation to the TMO would be addressed by Housing Management section.

2. Highlighted the report’s criticism of the Council’s Building Control Department and the Council’s actions in the aftermath of the fire. 

3. Explained the timetable for the Council to provide a final response which would completed following consultations with survivors, the bereaved and the local community. 

4. announced that the Council would be undertaking a review of the following;

5. Emphasised that the Council had introduced a rota in relation to emergency responses with every role populated, designated staff trained in their role, and the rota is live 24 hours a day 365 days a year. The Chief Executive added that she could be contacted at any time where necessary and that the Council’s preparedness had improved considerably since 2017 but there was still work to be undertaken. 

6. The Council was required to report to the London Resilience Board which is overseen by the Mayor of London.

7. Disclosed that there was no cladding on Council owned housing blocks that required to be removed. Within the borough, there were privately owned blocks that were undergoing work to remove unsuitable cladding.

8. That the Council has received assistance from the Centre for Scrutiny and the British Standards Institute in developing mechanisms to improve both scrutiny and safety mechanisms. 

The Committee discussed its own role in terms of oversight noting that;

1. Risk management was a constant theme considered by the Committee but that it was always a work in progress. The Committee concluded that it needed to undertake work on the risk register.  David Hughes, the Director of Audit, Fraud Risk and Insurance acknowledged that the risk management strategy had been a work in progress adding that the report would help the Council formulate a strategy.

2. That the Committee met five times a year and discussed topics scheduled for particular meetings months in advance. The Committee suggested that officers should bring topics to the Committee where there were serious issues rather than wait until the relevant item was scheduled. Committee members also questioned the value of items that where ‘to note.’ The Director of Audit, Fraud, Risk and Insurance accepted this and suggested that the Committee’s work programme be reviewed, and members provide feedback on topics they would like to consider.

Action by; Senior Governance Co-Ordinator and  ...  view the full minutes text for item 4.

The Council’s draft accounts were published on its website on 31 May 2024. Grant Thornton LLP had now completed their audit, and the audited accounts were presented to the Committee.

Shaheena Kabir, Interim Head of Financial Reporting and Controls confirmed that the accounts had not materially changed from the draft accounts but highlighted that there had been an amendment to the first page of the Annual Governance Statement to incorporate wording relating to the Grenfell Inquiry. However, this did not change the substance of the Annual Governance Statement.

The Committee recalled that they had considered the draft accounts on 17 June 2024 but did query the assumptions underpinning the contingent liability in relation to Grenfell Settlement which was circa £42 million on 31^st May 2024.

The Committee heard that the Council had reached a settlement in relation to civil claims in May 2023 costing circa £33.7 million. However, the Council was exposed to potential future claims arising from the Grenfell Tragedy including prosecution. The provision of circa £42 million reflected this.

The Committee agreed to

·         approve the Final Statement of Accounts 2023/24; and 

·         delegate the final approval of the audited 2023/24 accounts to the Executive Director of Resources (Section 151 Officer) following consultation with the Chair of the Committee; and

·         Requested that the approved accounts be circulated to the Committee for information. 

The Chair, noting the challenges in delivering timely audits of local authorities, thanked the Council’s Finance Section for their report and assisting Grant Thornton LLP in completing the audit on time.

The Chair invited the Paul Cuttle, External Auditor of Grant Thornton LLP, to present to the Committee who;

1. Clarified that there two audits; one of the Council and one of the pension fund.

2. Confirmed that the audit was undertaken as planned, they did not encounter any major problems, the accounts were of good quality and the required evidence was provided.

3. Stated that all issues in the report, relating to financial statements had now been completed with the exception of the International Accounting Standard (IAS) 19 assurances, from Ernst and Young who are the auditors of the London Pension Authority. IAS 19 relates to accounting for pension benefits. Once assurance was received, Grant Thornton LLP would sign the financial statements

4. Explained that, whilst there were some adjustments to amounts and issues relating to disclosures that were detected during the audit, they were minor and did not materially impact the financial statements.

The Committee in response made the following points; 

1. That the audit showed that the council had now implemented a data classification policy in line with recommendations made during the previous audit on cybersecurity but did not contain information on the effectiveness of the policy.

2. The External Auditor responded that, in relation to IT, they look at controls that would impact on the IT systems that produce financial statements. In relation to other areas theses would be looked at but they would be an area for internal audit.

3. That an error in the valuation of a school had resulted in an increase of circa £9.1 million in property, plant and equipment in the balance sheet. The Interim Head of Financial Reporting and Controls explained that the error was the result of the external valuer basing the value on the basis that it was a mainstream school when it was a school for children with special education needs and disabilities. Work was being undertaken with the external valuer and the property section to ensure that this error does not recur.

In response to further questioning from the Committee, the Interim Head of Financial Reporting and Controls, and Mike Curtis, Executive Director of Resources, explained that the Council procured the external valuer who then makes a report. They are provided with information about the property but do not necessarily visit it. Their report would be scrutinised by the finance team. The Executive Director of Resources emphasised that the accounting system contained checks, and the External Audit was part of this. 

The External Auditor added that this was not an uncommon error and that assumptions are made when determining the value of property. The use of specialists can assist, however valuers can come to different conclusions as to the value.

The Committee then heard from the External Auditor on the audit of the pension fund;

1. All work outstanding at the time of the report’s publication had now been completed and the accounts could be signed off.

2. The audit was undertaken as planned, they did not encounter any major problems, the accounts were of good  ...  view the full minutes text for item 6.

The Committee reviewed the action tracker and sought an update on the implementation of Oracle. The Director of Audit, Fraud, Risk and Insurance explained that the Oracle was still scheduled to go live on 1^st April 2025 and that Lisa Taylor, Head of Financial Management, was monitoring its implementation. 

The Committee discussed the work programme noting that it would need to be updated in light of the Grenfell Inquiry.

Action By: Senior Governance Co-Ordinator