Venue: Conference Room, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions
Contact: Metin Halil
WELCOME AND APOLOGIES FOR ABSENCE
Councillor Maguire (Chair) welcomed everyone to the meeting.
Apologies for absence were received from Councillors Robert Hayward, Andy Milne and Doris Jiagge.
Apologies for lateness was received from James Rolfe (Executive Director – Finance, Resources & Customer Services)
There was a private meeting between Members and BDO (External Audit), before the start of the scheduled Committee meeting. (18:45 – 19:00).
DECLARATION OF INTEREST
Members of the Audit & Risk Management Committee are invited to identify any dis-closable pecuniary, other pecuniary or non – pecuniary interests relevant to items on the agenda.
There were no declarations of interest.
ORDER OF AGENDA
AGREED that the order of the agenda be varied so that BDO could complete the Statement of Accounts (2016/17) Audit.
The minutes follow the order of the meeting.
To receive from BDO (external auditors) a report highlighting the key issues arising from the Council’s financial statements for the year ending 31 March 2017.
RECEIVED from BDO (external auditors) the Audit Completion Report on the Statement of Accounts 2016/17 and the Use of Resources.
1. The report presented BDO’s audit findings of the 2016/17 Statement of Accounts, the financial statements opinion. The report was introduced by Andrew Barnes (BDO) who highlighted:
a. Andrew Barnes gave his apologies for the late report, which was only received by the committee on Wednesday 27 September 2017 in the ‘TO FOLLOW (2)’ agenda pack.
b. Andrew went through the summary (pages 3-7 of the report) which contained all the information the Committee needed to know regarding the outstanding issues of the audit and the stage at which BDO were with resolving those issues before delivering their Audit opinion by Friday 29 September 2017.
c. The outstanding matters, when drafting the report, are listed on page 9 of the report;
· Item 1 – Information that BDO were awaiting from the Council had now been received and the issue had now been addressed.
· Item 2 –
i) Valuation of HRA assets – this issue was still outstanding. BDO had been in dialogue with the Council’s valuers for some weeks now. The latest correspondence received from the valuers still did not fully address the issues raised. BDO have now gone back to the valuers with a further follow-up query. The valuers are well aware of the time critical nature of this issue, which has still not been resolved.
ii) Creditors – This had been completed and is shown on the unadjusted area within the report.
iii) Other Disclosures – This was about wrapping up the actual Statement of Accounts document that will be published. This is a very complicated document that has a lot of manual processes that need to be changed and updated.
iv) Going Concern – This had been completed and was not an issue for the Council.
v) Pension Scheme – The Pension Fund Audit had been completed and would be published by Friday 29 September 2017.
vi) Contingencies and Commitments – BDO had some final questions regarding this item.
vii) Related Parties – This item had been completed.
viii) Laws and Regulations - This item had been completed.
ix) Review and agreement of the WGA data collection tool against the final set of financial statements – This would be done following completion of the Statement of Accounts.
· Item 3 – Clearance of internal quality control review process – This was in progress.
· Item 4 – Subsequent events review – Basic work had been done.
· Item 5 – Final review and approval of the financial statements – Review & approval by the Audit & Risk Management Committee.
· Item 6 – Management representation letter, as attached in Appendix VI, to be approved and signed.
d. Material misstatements (detailed on page 4 of the report) had all been changed and there was no overall impact on the financial position for the Council. Changes were made within the accounts. There is still one significant issue that is still unresolved and discussions are ... view the full minutes text for item 255.
To receive from BDO (external auditors) a progress report on the external audit.
RECEIVED from BDO a progress report on the External Audit to the 20 September 2017.
1. The Audit Progress report was introduced by Andrew Barnes (BDO).
2. The report provided an outline of progress, to the Committee, against BDO’s proposed work for 2017/18.
3. The report reflected what had been previously discussed at agenda item 3, in respect of the fact that the Audit won’t be completed by Friday 29 September 2017, as it should be and the whole of government accounts, as a result of this, won’t be completed by Friday 29 September 2017, as it should be. As reported, the use of resources deadline would not be achieved but in theory it had been achieved.
4. Work was under way on the benefit claims audit and other audits that BDO need to do. The report reflects the position BDO are in.
AGREED to note the progress report on the external audit to 20 September 2017.
To receive the report of the Executive Director of Finance, Resources & Customer Services presenting the Audited Annual Statement of Accounts for the 2016/17 financial year along with a schedule of the agreed adjustments between the draft and final statement.
RECEIVED the report from the Director of Finance, Resources and Customer Services requesting approval of the final audited 2016-17 Statement of Accounts for Member’s approval and to note the adjustments between the draft and final audited Statement of Accounts, in accordance with regulations.
1. The report was introduced by Stephen Fitzgerald (Assistant Director - Finance).
2. This was the formal introduction to the 2016/17 Statement of Accounts, having listened to what the external auditors have told finance and their analysis of it.
3. The Statement of Accounts representing net revenue expenditure of just over £236M. The Medium Term Financial Plan (MTFP) showing a budget deficit of £5.7M and a capital programme of approximately £285M.
4. Over the past few weeks Finance had been dealing with Members enquiries and external audit enquiries, so as to come to a final and fair view of the accounts.
5. There had been no fundamental change from when the 2016/17 Statement of Accounts were first presented to the committee in July 2017. With regards to the valuations issue, this had also been a problem with other Local Authorities Stephen had worked with. However, this didn’t mean that this issue would not be resolved for the 2018/19 financial year, where there will be a full accelerated timetable that all Local Authorities have to achieve.
6. The detailed questions that Members had submitted to Finance, had been dealt with when the committee previously considered the Statement of Accounts at the early September 2017 meeting.
AGREED that the Final Audited Statement of Accounts for the year ending 31 March 2017 be approved and the Certification of Accounts signed by the Chair (Councillor Maguire) and the Executive Director of Finance, Resources & Customer Services (James Rolfe).
To receive a report from the Executive Director of Housing, Health and Adult Social Care providing an update on properties in Enfield following the Grenfell disaster.
RECEIVED the report of the Executive Director of Housing, Health & Adult Social Care providing a briefing on the Grenfell fire and the response by the London Borough of Enfield.
1. The report was presented by Madeleine Forster (Interim Assistant Director – Council Housing & Regulatory Services) as detailed at pages 1 – 3 of the report, located in the main agenda pack.
2. The bar had been raised by the experiences of the Grenfell disaster and the Council made a decision soon after, that over a period of time, they would be looking to install sprinklers into their high rise blocks. The Council would be starting with Dorset House and Keys House because they could add sprinklers into the contract they hold for those 2 high rise blocks. They would use these 2 blocks as a pilot this year and review with residents in order to create a proto type to roll out to other blocks.
3. In terms of tenant behaviour and the Council’s attitude towards that, there is now an enforced zero tolerance to anything that is left in communal stairways i.e. door mats which are flammable and can spread fire. Action will also be taken against tenants who have door security grills which impede exit in case of fire. Also, looking to increase parking enforcement in areas around high rise blocks where there is evidence of people parking cars and denying fire brigade access, checking legal processes and taking action in a number of areas.
4. All members had been told of the status of their particular blocks in their own respective wards. Housing teams have attended ward forums, especially over the summer period, including ward forums where high rise blocks (over 6 storeys) are situated. Additionally, the housing newsletter had a recent insert, which was designed in conjunction with the fire brigade, so as to provide residents with the latest information to keep them informed.
5. In response to the Chair’s request for any questions or comments, the following were discussed:
a. Councillor Savva questioned the type of action that would be taken on people who did not follow the rules and regulations of the fire brigade. Madeleine Forster clarified the following:
· Door mats were being removed after letting tenants know and kept for a length of time before disposal.
· Where people are co-operating by removing items, letters are posted to thank them for doing so.
· Parking enforcement – the Council are limited until emergency parking orders are in place. These were currently being consulted on. There at present notices are being put on peoples’ cars saying that they are parked in a space that would impede a fire engine getting through, should a fire occur. No enforceable action can be taken until orders are in place.
Post meeting note:
We have been working closely with our consultants The Project Centre who have visited each of the 30 HRA sites, identified by the Fire Service as having an access risk, during the day and night. Plans ... view the full minutes text for item 258.
To receive a report from the Executive Director of Finance, Resources and Customer Services providing a Risk Registers update.
RECEIVED the report of the Director of Finance, Resources & Customer Services presenting registers for the Service Delivery operating areas (Health, Housing & Adult Social Care, Children’s Services and Regeneration & Environment Departments).
1. Officers from relevant service areas were in attendance to address any questions about their registers.
2. The paper provides the register for the Council Services operating areas that cover 3 departments which include HHASC, Children’s Services and Regeneration & Environment.
3. The Register contains 22 risks as summarised in the table at pages 2-3 (Para 3.5) of the report. Since the last report on the Service Delivery risks, there have been 7 risks removed from the register and these are highlighted in grey in the 2nd table at para 3.5 of the report.
4. The Service Delivery Risk register is provided in Appendix 1 (pages 7-11) of the report.
5. The following questions raised in response to the risk registers:
a. The Chair referred to the red risk (appendix 1) relating to Children’s Services (CS 003 – Increased Service demand). Clarification by Tony Theodoulou (Executive Director – Children’s Services) that this was an inherent risk. The risk assessment hadn’t been changed since the last time he had reported to this committee. Because the risk still remained and is compounded by the reducing budgets and service reductions that the department has made. This was being done as carefully as possible so as to mitigate risks.
However, there is no doubt that with a growing population, growing levels of poverty, changes to legislation such as Universal Credit, the introduction of the homelessness reduction act, there will be further demands for Children’s Services at a time of diminishing resources.
b. The Chair noted that this risk was being kept under review and looked at every 2 months. Tony Theodoulou, clarified that as detailed in the budget monitor, this was an unavoidable pressure.
c. Councillor Savva wanted to know what officers were most concerned with, in view of the financial cut backs. Doug Wilson (Head of Strategy & Service Development, HHASC) clarified that the picture for adult social care was very similar to that of Children’s Services, in terms of increasing numbers of people. The population is growing substantially and the department were seeing those numbers translated into people who access hospital services. This was a cost and demographic pressure.
d. Bindi Nagra (Assistant Director – Strategy & Resources) further highlighted areas of concern regarding adult social care:
· The market for care is very challenged although the Council has one of the largest number of residential care homes in London. Other local authorities are placing patients in Enfield at a fast rate, pushing up prices the Council has to pay, by using its capacity.
· An underlying demographic pressure that all departments are experiencing across the Council.
· Pressure from the NHS, which is constant throughout the year. Enfield has 2 hospital trusts operating in its patch, North Middlesex and Chase Farm. The pace at which the NHS wants Enfield to dis-charge people, not only increased ... view the full minutes text for item 259.
To receive the report of the Executive Director of Finance, Resources & Customer Services summarising the work that the Internal Audit and Risk Management Service (ARMS) has completed for the April to September 2017.
RECEIVED the report of the Director of Finance, Resources & Customer Services summarising the work that the Internal Audit and Risk Management Service (ARMS) had completed for the period 1 April 2017 to1September 2017.
1. During the review period, the internal audit team had commenced 77% of the current plan of which 7% had been completed. The team were still aiming to get 95% of the plan to draft report stage by the end of March 2018. All indications show that the team are on track to achieve that. Chart 1 (page 14) at para 3.4 of the report provides a summary.
2. As detailed at table 1 (page 15) para 3.5 of the report, 11 assignments had been added to the plan since the audit plan had been approved by the Committee in March 2017, including 2 that have been deferred.
3. As presented at table 2 ( page 15) para 3.6 of the report, the team have completed 5 assignments so far, with 2 of those resulting in actions for improvement as they had assurance opinion. The other 3 were completed assurance maps for trading companies. Those where improvements were needed the team were trying to analyse those findings in terms of themes and those are presented at chart 2 (page 16) para 3.6 of the report.
4. In terms of Managers progress with the implementation of internal audit recommendations, this is summarised in chart 3 ( page 16) para 3.8 of the report. The team have followed up 190 recommendations since the beginning of the year, relating to 79 high risk ratings and 111 medium risk ratings. Overall 34% of high priority recommendations and 23% medium recommendations had been implemented.
At the time of writing the report, there have been a lot of managers who had not provided the team with a response and were not able to assess their progress. These are shown as red bars in chart 3 (page 16) of the report. Many of these related to schools.
5. In terms of the Counter Fraud team performance, council housing recoveries totalled 70, which were, illegally bought, sub-let or abandoned. In terms of temporary accommodation, the team were doing better than the profile. In terms of recoveries, financially, the team were doing very well and there would be no problem achieving the target by the end of the year. Table 4 (page 17) para 3.9 of the report detailed where the savings have come from. The team are also continuing to support the no recourse to public funds (NRPF) team by placing an investigator with them. They are also starting another pilot scheme with the Right to Buy team by putting an investigator within that team also.
6. Quality assurance targets and achievements are detailed in table 5 (page 18) para 3.16 of the report and the team are on track with this.
7. In response to the Chair’s request for any questions or comments, the following were discussed:
a. Councillor Simon informed the ... view the full minutes text for item 260.
FINANCIAL RESILIENCE CAPACITY BUILDING PROGRAMME - 20:10 - 20:20
To receive a verbal update from the Executive Director of Finance, Resources & Customer Services regarding the Financial Resilience Capacity Building Programme.
RECEIVED the verbal update from James Rolfe (Executive Director – Finance, Resources & Customer Services) on the Financial Resilience Capacity Building Programme.
1. This was a leadership programme for finance managers/leaders run by Grant Thornton, over the past 3-4 years. It has proved to be very useful and brings in senior speakers providing a useful networking experience for more senior finance staff across London and is very effective.
2. Grant Thornton are currently trawling around for the next tranche here in London (tranche 3). However, because it is focussed at the higher end of the hierarchy, they are struggling to get the numbers at present. So they may well have to change the programme for middle managers who operate in finance.
3. However, they may move away from just finance capacity building programme to something called a place account to try and share best practice about how you create places, especially for all the different professions that work in the regeneration space.
4. There was also a brief update on things management were doing to build resilience into the finance team:
· There is a recruitment action in place to find a replacement for Stephen Fitzgerald (interim) by October/early November 2017.
· Recruiting to 4 permanent posts within the Finance Team, to replace interims and leavers.
· Setting up of a new finance team to support the Council’s trading companies. So as to provide financial information, governance and business support, etc, as the companies need to focus on winning business rather than concerning themselves with back office functions.
· Investing in a budget and consolidation tool so that managers in the Council can do more of their own forecasting and management rather than leave for the finance team. Finance teams can then focus on big strategic issues and reduce the pressure on finance staff who had been cut by 40% because of Enfield 2017.
5. There is a lot of work going on within finance teams to build the broader resilience and once the financial resilience programme has been sorted out for the next round then that would help train and develop staff aswell.
AGREED to note the verbal update of the Financial Resilience Capacity Building Programme.
FINANCIAL REGULATIONS - CONSTITUTION REFRESH - 20:20 - 20:30
To receive a verbal update from the Executive Director of Finance, Resources & Customer Services regarding the Financial Regulations – Constitution refresh.
RECEIVED the verbal update from James Rolfe (Executive Director – Finance, Resources & Customer Services) on the Financial Regulations Constitution Refresh.
1. The re-draft of the Financial Regulations was not moving forward at present as Finance were re-drafting the procurement regulations instead. Once the procurement regulations had gone through Executive Management Team, Council and Audit & Risk Management Committee, finance would then look at the financial regulations and property regulations as well. It was therefore on the radar, but immediate priority was to deal with the procurement regulations.
Audit & Risk Management Committee
a. To receive and agree the minutes of the Audit Committee meeting held on Tuesday 7 September 2017, as a correct record.
b. To note the update on actions identified at the last meeting.
AGREED that the minutes of the Audit Committee meeting dated 7 September 2017 be approved and signed as a correct record.
1. Audit & Risk Management Committee (Independent Person) – The Chair and James Rolfe (Executive Member – Finance, Resources & Customer Services) had received an e-mail from Chaitali Roy (Independent Person) tendering her resignation from the Committee, siting concerns about the demands of the role in addition to her day job and the rates paid. The rates of pay were looked into and the Council’s rates are very competitive and was therefore a choice of workload.
2. Chaitali Roy has therefore taken the decision to step down and also steps down from the Lee Valley Heat Network Audit Committee aswell.
3. There is therefore a vacancy for an independent person. With the Committees agreement, James Rolfe, in the first instance, wants to approach one of the Board Members for the Housing gateway and also one of the Board Members from the Health & Wellbeing Company. Both of these individuals come from a Finance & Risk perspective. If no interest is shown from either person then the Committee could go through a more formal recruitment process.
4. The committee were happy to agree with James Rolfe’s proposal and also wanted to record their thanks to Chaitali Roy for her work over the past couple of years as the Audit & Risk Management Independent Person.
The Committee is asked to agree the Work Programme put forward for the 2017/18 municipal year along with the timetabling of each issue on the Work Programme.
RECEIVED an outline work programme for the Committee covering the 2017/18 Municipal Year Committee.
AGREED to approve the outline work programme for 2017/18.
DATES OF FUTURE MEETINGS
To note the dates agreed for future meetings of the Audit Committee:
Thursday 28 September 2017 – 07:30 pm
Wednesday 1 November 2017
Thursday 11 January 2018 – 07:30 pm
Wednesday 7 March 2018
(All meetings to commence at 7.00pm unless otherwise agreed.)
NOTED the dates of future meetings:
Wednesday 1 November 2017
Thursday 11 January 2018 - 07:30pm
Wednesday 7 March 2018
(All meetings to commence at 7.00pm unless otherwise agreed.)