Agenda and minutes

No apologies were received.

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.

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The minutes of the ordinary meeting held on 27 November 2023 are submitted for confirmation by the Committee.

The Committee asked that the minutes be edited as it implied that the external auditors were not involved in the Annual Governance Statement which was not the case.

The Committee, following discussion agreed that the action relating to electric vehicles be retained on the action tracker until the review had been completed.

Subject to the amendments listed, the minutes of the meeting held on 27 November 2023 were confirmed as a correct record.

The minutes of the extraordinary meeting held on 30 November 2023 are submitted for confirmation by Cllr Hargreaves, Cllr Gardner, Cllr Simmons and Co-Optee Liz Murrall.

The minutes of the extraordinary meeting held on 30 November 2023 were confirmed as a correct record by the Chair, Cllr Gardner, Cllr Simmons and Co-Optee Liz Murall.  

The Head of Internal Audit (HIA) reported to the Committee noting that, as of 18^th March 2024, ten audits had been finalised, two of which were rated ‘limited assurance’, whilst nine audits were at draft report state. The two limited assurance ratings related to the housing allocations and parking permits. The HIA said she was confident that all audits would be concluded by the end of the fiscal year.

The Director of Audit, Fraud, Risk and Insurance (DAFRI) clarified to the Committee the criteria used to determine audits explaining that housing was an area of focus due to high demand for social housing in the borough and the consequences of housing not being let to those most in need.

The HIA explained that housing allocations received a limited assurance owing to the following;

·         In nine out of ten cases, documentation was not completed or held on file for all cases that the internal audit team reviewed; and

·         In three out of ten cases, documentation did not contain evidence that officers had reviewed and authorised offers being made to the eligible bidders; and

·         There were delays in shortlisting and assessing applications; and

·         There were delays in starting the bidding process when a council property was confirmed as vacant.

The HIA said that Housing Allocations had accepted the recommendations from Internal Audit, to address the issues highlighted, and these would be implemented by 31^st March 2024.

The Committee expressed concern relating to the high level of cases of incomplete documentation and information suggesting that it heightened the risk of fraud and indicated issues relating to service quality and competence.

In response to questioning, DAFRI said that the Executive Director under whose remit the service falls, as well as the relevant Lead Member, receive internal audit reports. Regarding follow up, internal audit looks for evidence that their recommendations have been implemented.

DAFRI disclosed that internal audit reports were not submitted to the select committees as a matter of procedure, however this could be changed going forward.

Parking Permits was given limited assurance owing to the following;

·         Storage of completed applications and unallocated permits were not secure; and

·         Renewals were not automatically cancelled within 72 hours of non-payment as the permits need to be manually cancelled by staff. This was not being done in a timely fashion; and

·         Reconciliation of paper permits against the permit system with current stock had not been recorded for several months. Additionally, some permits had been issued out of their numbered order and no explanation had been recorded as to why.

·        Policy documents were updated on an annual basis which the HIA said was not appropriate given that changes occur more frequently; and

·       The Council website contained incorrect information in relation to the timelines for processing permits and contained information relating to permits that have been discontinued; and

The Committee heard from the Director of Customer Delivery (DCD) whose service covered the process of parking applications who sought to assure the Committee that the service had implemented  ...  view the full minutes text for item 4.

The HIA outlined the challenges of anticipating issues requiring review cautioning that it was an indicative plan based on factors such as areas that needed to be audited over a period of time, areas that have not been subject to audit recently and discussions with departmental heads on issues that have arisen. The corporate risk register was also used to identify areas for audit.

Responding to questioning, DAFRI said that the Council had moved to an inhouse team rather than use an external firm. The internal audit was based on the ‘3+9’ approach; a clear focus on the risks for the next three months and an indication of the risks in the next nine months. This enabled flexibility in planning which resulted in the efficient use of internal audit resources. DAFRI suggested that a 12-month internal audit plan would likely go out of date.

DAFRI and HIA explained departments were given prior notice that they are being audited which led the Committee to suggest that giving departments advance notice of the audit could result in managers seeking to provide a misleading impression of the department and to conceal fraud, errors or incompetence.

DAFRI responded that, whilst advance notice was given, it was not to the extent that would enable managers to conceal issues and internal audit does not disclose in detail what the audit process is. In addition to this, DAFRI emphasised that often departmental managers approach them, of their own volition, asking them to carry out an audit of their department to address concerns that they have. Also, if there was suspicion of fraud or some other irregularity, then the department in question would not receive any notice of the audit.

Cybersecurity was discussed and DAFRI informed the committee that he planned to meet the Chief Digital Information Officer to discuss issues arising following the move from bi-borough cybersecurity arrangements to the Council specific arrangement.

The Chair requested that a briefing be provided to the Select Committee Chairs on cybersecurity.

Action: Director of Audit, Fraud, Risk and Assurance

DAFRI also confirmed that he had not had any requests or input from the select committees in relation to audits. DAFRI explained that the Internal Audit Plan was provided to the Chair of the Overview and Scrutiny Committee and the Scrutiny Manager. DAFRI said he would discuss with the Scrutiny Manager the possibility of the Select Committees proposing topics for internal audit as well as submission of reports for consideration. 

Action: Director of Audit, Fraud, Risk and Assurance

RESOLVED-

That the Committee note the report.

DAFRI explained that he was responsible for the strategic procurement function which related to assurance that the Council was complying with procurement regulations. The Procurement Act 2023, which comes into force on 1^st October 2024, will see changes in the rules relating to procurement. The Council was preparing for its implementation including the establishment of a comprehensive contract register.

From 1st February 2025, every council will be required to produce a procurement pipeline of tenders that will be issued over the next twelve months where the contract is greater than £2 million. Contracts above £30k must be advertised. Councils will be required to give a good reason why the contract cannot be tendered. In addition to this, key performance indicators in relation to contracts greater than £5 million must be published. The Government will be establishing a Procurement Review Unit to which unsuccessful bidders for council tenders will be able to complain to if they believe procurement regulations were not complied with.

Responding to the Committee, DAFRI said there was a risk that more procurement decisions could be challenged. Under the new rules, where a contract award is contested, the Government Procurement Review Unit can prevent a contract from being awarded if it has not been signed pending their investigation. Where the contract has been signed, the courts shall have the authority to set aside a contract if it is found that the Council breached regulations. The unsuccessful bidder can also claim damages for lost profits if it is found that they should have been awarded the contract under the procurement regulations.

The Chair asked that, in addition to this Committee, all Chairs of the Select Committees needed to be briefed on the new rules and clarity of the roles of each Committee in relation to oversight of the rules. The Chair also asked that training be provided to members.

Actions: Director of Audit, Fraud, Risk and Assurance

The Committee asked that a further update be provided at the meeting scheduled for 23^rd September 2024.

Action: Director of Audit, Fraud, Risk and Assurance

Action: Senior Governance Co-Ordinator

RESOLVED-

That the Committee note the report.

DAFRI recalled that the Risk and Control Board reviewed the Corporate Risk Register every six months and the Register would be reviewed by the Committee as well.

The Committee then examined the risk register whilst DAFRI took the Committee through the risks, the owner(s) of the risk and the proposed actions to mitigate, or further mitigate, the risks. DAFRI explained that the Committee would receive a further report stating whether the mitigation had the desired impact with an explanation if it did not. Three new risks had been added whilst one risk had been removed.

The Committee noted that 19 risks had been listed and questioned if all the risks listed met the definition of a strategic risk. In addition to this comment was made that some of the risks contained more detail than was necessary.

Responding to questioning, the Executive Director of Resources (EDR) disclosed that the Corporate Risk Register does take into consideration the spate of councils issuing a Section 114 notice citing the risk relating to impact of significant external economic factors, affecting the Council and service delivery. The EDR stressed that the Council was not at risk of issuing a Section 114 notice and had financial mechanisms in place that functioned as an early warning system.

RESOLVED-

That the Committee note the report.

The Committee reviewed the draft report and requested that the report refer to Cozette Reczek as being ‘succeeded’ rather than ‘standing down’ whilst Tara Odgers joined in July 2023 and not May. There was also an error in paragraph numbering.

The Committee asked that the amended report be circulated offline and to confirm the date when the report would be presented to full council.

Action: Senior Governance Co-Ordinator

The Committee reviewed the forward programme and action tracker. Since the meeting that took place on 27 November 2023, progress had been made on closing longstanding actions with 31 actions completed. The number of outstanding actions had been reduced to seven which were in the process of being addressed.

RESOLVED-

That the Committee note the Forward Programme and Action Tracker.