Agenda and draft minutes

Venue: Conference Room, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions

Contact: Metin Halil 

Items
No. Item

321.

WELCOME AND APOLOGIES FOR ABSENCE - 19:00 - 19:05

Minutes:

Councillor Maguire (Chair) welcomed everyone to the meeting.

 

Apologies for absence were received from Councillor Andy Milne, Jayne Middleton-Albooye (Interim Assistant Director – Legal & Governance), Alison Trew (Head of Corporate Policy & Performance) and Vivian Uzoechi (Insurance & Risk Manager).

 

There was a private meeting between Members and BDO (External Audit), before the start of the scheduled Committee meeting at 06:45pm in Room 6.

 

 

322.

DECLARATION OF INTEREST - 19:05 - 19:10

Members of the Committee are invited to identify any disclosable pecuniary, other pecuniary or non - pecuniary interests relevant to items on the agenda.

Minutes:

There were no declarations of interest.

323.

BDO - ANNUAL AUDIT LETTER 2016/17 - 19:10 - 19:20 pdf icon PDF 3 MB

To receive from BDO (external auditors) the Annual Audit Letter summarising the key issues arising from the work carried out by BDO during the 2016/17 audit.

 

Minutes:

RECEIVED from BDO (external auditors) the Annual Audit Letter 2016/17.

 

 

NOTED

 

1.            The report was introduced by Andrew Barnes (BDO), highlighting the following:

 

a.    This was BDO’s Annual Audit Letter, which is a requirement of the National Audit Office (NAO) which will also be available on the NAO web site. This was a distillation of the report that was bought to the last Committee meeting on 28 September 2017 and is flagging up a few issues that arose in reporting the audit, how those issues were addressed and what BDO’s overall conclusions are.

b.    The overall findings, are detailed at page 2 of the report, and confirms that BDO had now issued their true and fair opinions on both the Council’s accounts and Pension fund financial accounts. This had been discussed at the last committee meeting, which was late, but had now been completed. Within the financial accounts there were some uncorrected mistakes, but as they were of such small magnitude and not material to the financial statements, they were not required to be adjusted.

c.    As reported previously, BDO did have some difficulties with the evidence to support the valuation of housing stock, but are now happy that the reporting position is materially accurate and therefore adjustment wasn’t required as was previously reported.

d.    In terms of the use of resources opinion, BDO gave a clean opinion. From comments made in this report and the previous one, the committee had been made aware about the financial challenges the Council is facing. Work was in place to meet the requirements needed by the council, to keep the balance partnership and to deliver the savings the council needed to deliver.

e.    BDO also looked at the council’s regeneration projects where challenges are being dealt with and BDO were happy with the evidence seen to take these forward.

2.    The following issues raised in response to the report:

a.    Councillor Simon referred to page 13 of the report and the fact that BDO were unable to issue the audit certificate to close the audit, until work in respect of objections to the 2015/16 accounts were completed. Councillor Simon asked if this work was still outstanding and the fact that an audit opinion could be provided but not the certificate. David Eagles (BDO) clarified that external audit have to consider whether the issues raised by the objections could materially influence the accounts or materially influence the conclusion  in respect of use of resources. None of the three objections that are being looked at are considered to have an impact on the accounts or use of resources.

b.    Councillor Simon asked what the issues were in respect of the objections. David Eagles clarified the following:

·         Objection relating to the Council’s non-use of Compulsory Purchase Orders (CPO) in respect of Meridian Water scheme land, which had been concluded by means of a written statement of reasons to the objector.

·         Objection relating to the purchase of land on/around the Chase Farm site, connected to the education  ...  view the full minutes text for item 323.

324.

BDO PROGRESS REPORT - 19:20 - 19:30 pdf icon PDF 84 KB

To receive from BDO (external auditors) a progress report on the external audit to 26 October 2017.

 

Minutes:

RECEIVED from BDO (external auditors) the Audit Progress Report to 26 October 2017.

 

1.    This report highlighted where BDO were in the Audit Cycle.

2.    As detailed on page 20 of the report, BDO had now completed their financial statements audit and issued their opinion (24.10.17).  They were now working through the Whole of Government Accounts audit. Whereby, the finance team have to report up to DCLG (Dept. of Communities & Local Government) in a technical format.

3.    As detailed on page 21 of the report, work was still ongoing on the Housing Benefit subsidy claim but was largely completed. There were some queries outstanding with the benefits team but work was on target to be finished by the end of November 2017.

4.    As detailed on page 22 of the report, the Audit Certificate is still open and will be issued on completion of the audit of the financial statements, Whole of Government accounts and the resolution to the objection to the accounts. The Annual Audit Letter to be drafted upon completion of audit work and the grants report to be drafted after certification work has been concluded.

5.    The Chair thanked Andrew Barnes (BDO) for his report.

 

AGREED to note the progress report on the external audit to 26 October 2017. 

 

 

325.

SERVICE ENABLING RISK REGISTER UPDATE - 19:30 - 19:45 pdf icon PDF 335 KB

To receive a report from the Executive Director of Finance, Resources & Customer Services providing a Service Enabling Risk Registers update for Finance, Resources & Customer Services and Chief Executive’s Department.

(Report No.85)

 

 

Additional documents:

Minutes:

RECEIVED the report of the Executive Director of Finance, Resources & Customer Services (No.85) presenting registers for the Service Enabling operating areas of the Chief Executive’s and Finance, Resources & Customer Services.

 

NOTED

 

1.    The report was introduced by Christine Webster (Head – Internal Audit & Risk Management).

2.    The report presents the risk registers for the service enabling operating areas which complies the Chief Executive’s department and the Finance, Resources & Customer Services department risk registers.

3.    As detailed at 3.5 (page 2), the table shows 9 risks in total, with 4 (44%) of those assessed as green (low) and 5 (56%) assessed as medium risk. The Service Enabling risk register is also provided at Appendix 1 on pages 5 – 7 of the report, detailing the risks.

4.    The Strategic Risk Register was presented to the Committee on 28 September 2017 and is not presented in this report in detail. The Chief Executive (Ian Davis) was present to answer any questions concerning the Chief Executive’s element of the risk registers and James Rolfe was present to answer any questions relating to FRCS element of the risk registers.

5.    The following issues raised in response to the report:

a.    Councillor Simon queried the green rating against risk No.7 relating to Information Security. He felt that to score this risk as green seemed to understate what is quite a substantial risk and that it felt that it should be red. Councillor Simon also referred to a guide the National Audit Office (NAO) had produced relating to cyber security and that this NAO guidance should be evaluated against the Council’s performance looking at these risks. James Rolfe clarified that he felt that the risk should still be green as the dot denoting the assessment was in the wrong place. As detailed in appendix 1 (page 6) of the report, the dot at present shows a low impact and a high likelihood whereas the impact after mitigations is a relatively low probability. There is an imminent chance of a cyber-attack, but all the diagnostics the Council does and controls that have been put in place suggest the likelihood of it succeeding was relatively low.

b.    James Rolfe confirmed that he was happy to provide the paper Councillor Simon had asked for regarding the NAO guide to cyber security and evaluation against the Council’s performance. He would also update the committee on the new duty on Information Security requirements that are coming in April 2018.

ACTION: James Rolfe (Executive Director – Finance, Resources & Customer Services).

 

6.    The Chair thanked Christine Webster for the report.

 

 

AGREED to note the risks recorded in the service enabling risk registers.

 

 

 

326.

2017/18 INTERNAL AUDIT SERVICE PROGRESS REPORT - 19:45 - 19:55 pdf icon PDF 469 KB

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 period 1 April 2017 to 23 October  2017.

(Report No.84)

 

 

 

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services (No.84) summarising the work of the Internal Audit & Risk Management Service for the period between 1 April and 23 October 2017.

 

NOTED

 

  1. During the review period, the Internal Audit Team had commenced 58 assignments of which 14 had been completed, as detailed at 3.4 and Chart 1 (page 10) of the report.
  2. As detailed at 3.4/Chart 1 (page 10) of the report, 4% of assignments were at draft report stage but the team were on track to achieve their performance indicator of 95% by the year end.
  3. As summarised in 3.5/Chart 2 (page 11) of the report, there had been some changes to the audit plan since it was agreed. With 11 assignments added to the plan and 2 deferred/cancelled. More detail of these can be found in Appendix 2 (page 21) of the report.
  4. As detailed at 3.6/Table 1 (page 11) of the report, there is a list of completed audits along with audit opinions for each one. There have been 2 audits with limited assurance so far, as detailed at 3.8 & 3.9 (pages 12 – 13) of the report. Chart 3 (page 12) of the report highlights the number of findings for different risk themes identified from the completed audits.
  5. Details for the 2 audits with limited assurance opinions are as follows:

a.    Regeneration projects – where the team looked at the governance structure and financial controls for the Meridian Water Development Programme and identified 2 main risks relating to:

·         Format and information for budget reporting of the programme which had not been clarified at the time.

·         The governance structure, which was relatively cumbersome given the size of the project.

b.    St. Pauls CE Primary School – two high risk issues were identified relating to:

·         Expenditure

·         Private Fund Records

  1. Managers’ progress with implementing internal audit recommendations, as detailed at 3.10 (page 13) of the report. Since the start of the year, the team have followed up 220 recommendations and as of October 2017 42% of high risk actions have been fully implemented and 38% of medium priority risks have been implemented. Chart 4 (page 14) summarises the progress for the different departments in implementing management actions. This was an improvement since the last meeting.
  2. In terms of counter fraud actions, para 3.13/table 2 (page 14) of the report summarises the teams progress against annual targets. Whilst the team are doing well on the savings from the investigations and preventative work, they have fallen slightly behind on council housing recoveries. However, they are ahead from where they should be, at this time of the year, for temporary accommodation recoveries.

Table 3 (page 15) of the report provides more detail of counter fraud savings, broken down by different types of activity.

8.    In terms of quality assurance, as detailed at para 3.17 (page 15) of the report and at table 4 (page 16). The Key Performance Indicator (KPI) that hadn’t made the target related to days between the team  ...  view the full minutes text for item 326.

327.

AUDIT & RISK MANAGEMENT COMMITTEE ASSESSMENT OF GOOD PRACTISE AND EFFECTIVENESS - 19:55 - 20:05 pdf icon PDF 258 KB

To receive a report from the Executive Director of Finance, Resources & Customer Services providing a report on the Audit & Risk Management Committee Assessment of Good Practise and Effectiveness.

(Report No.86)

 

 

 

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services (No.86) presenting the results of the Audit & Risk management Committee’s self-assessment of good practise and effectiveness.

 

NOTED

 

1.    Christine Webster (Head – Internal Audit & Risk Management) had met with members of the committee, to obtain their self-assessment of the committee’s good practise and effectiveness.

2.    This report presents the results of that review, which was undertaken against CIPFA’s guidance on Audit Committees. It covered good practise areas including the Audit Committee purpose, governance and membership support. There was some debate around effectiveness of the committee.

3.     The detailed results are presented at Appendix 1 (page 31-33) of the report. Summaries of the outcomes, on the way forward, have been detailed in table 1 (page 26-28).

Where the responses only partly complied with the standard or did not comply, there is a comment and proposed action to make some improvements.

4.    The following comments/questions raised in respect of the actions proposed as a result of members discussions with Christine Webster:

a.    Councillor Simon’s request that with a new committee coming in May 2018, it’s important to identify what member training needs are so as to communicate this to members. As the Chair of the Members & Democratic Services Group (MDSG), the group is meeting in January 2018 to look at training for new councillors. He has requested that the governance team look at training plans, not only for Audit & Risk Management Committee but also for committees like planning, pension investment, etc. In order that new members can be told that training is available if members want to sit on a particular committee.

Planning committee has a rule that members can only sit on one meeting before completing mandatory training which could be applied as a workable rule for other committees.

ACTION: Metin Halil (Committee Administrator)

b.    Councillor Simon’s further comments that the committees Terms of Reference should have indications as to the sort of things that can be considered in terms of undertaking a wider role. The committee should not be duplicating considerations with other committees i.e. councillor conduct committee. Considerations where a governance need isn’t assured by some other committee.

c.    The committee agreed the proposed actions identified in Table 1 (pages 26 – 28) of the report apart from the second proposed action relating to governance and whether a wider role for the committee would be beneficial. The committee agreed that a recommendation would be made when the new Audit & Risk Management Committee comes in next July 2018.

5.    The Chair thanked Christine Webster for her report.

 

 

 

 

 

AGREED to note the results of the assessment of Committee’s good practise, effectiveness and actions for improvement.

 

328.

WAIVERS REPORT AND UPDATE ON PROCUREMENT SPEND - 20:05 - 20:20 pdf icon PDF 457 KB

To receive the report of the Executive Director of Finance, Resources & Customer Services providing the Waivers report and Procurement spend update.

(Report No.82)

 

 

 

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services (No.82) presenting Contract Waiver Monitoring and Procurement Spend  2016/17.

 

NOTED

 

1.    The report was introduced by Paul Vernham (Head – Hub Procurement & Commissioning)

2.    The Contract Waiver Monitoring report last came to committee in 2016.

3.    The report provides a summary of contract waivers issued for the period May 2016 to September 2017. The number of waivers for this period was 4 representing a total contract value of £221,505 as detailed at Appendix 2 (pages 40-44) of the report.

4.    For the previous year (2015/16) there were 17 waivers with a total spend of £1.2M and for 2014/15 there were 40 waivers with a total spend of £6.5M. So, there has been a change leading to a downward trend of waivers.

5.    The procurement team are working a lot more closely with colleagues across the Council to minimise waivers. There were no waivers in the last 12 months and the other 3 were actually in 2016.

6.    The following comments made in response to the report:

a.    The Chair thanked Paul Vernham for the good progress made in reducing waivers.

b.    The Juvenile Appropriate Adult Service is being jointly procured with Haringey Council.

c.    The table at page 47 of the report summarises the spend in 2016/17 financial year.

7.    The Chair thanked Paul Vernham and Claire Reilly for their report.

 

AGREED to note the contract waivers in the reporting period, the reduction in the number of waivers and the procurement spend in 2016/17.

 

 

329.

REVIEW OF CONTRACT PROCEDURE RULES 2017 - 20:20 - 20:30 pdf icon PDF 238 KB

To receive the report of the Executive Director of Finance, Resources & Customer Services providing a Review of the Contract Procedure Rules 2017

(Report No.83)

 

Additional documents:

Minutes:

RECEIVED the report of the Executive Director of Finance, Resources & Customer Services (No.83) presenting a Review of the Contract Procedure Rules (CPR).

 

NOTED

 

1.    The report was introduced by Paul Vernham (Head – Hub Procurement & Commissioning) and Claire Reilly (Head – Procurement & Commissioning Market).

2.    This was a review of the CPR’s which set the guidelines for the Council to procure third party business services.

3.    The CPR review was not bought to committee last year given the changes around the Procurement Hub and legislative changes around procurement law. In addition to changes in the hubs around the council, there had been some changes within the Constitution.

4.    The review of the CPR’s had led to a reduction in the number of pages of the rules, easier to read and to make procurement law simpler and easier to read. The team has maintained the essence of what was in the CPR’s before. There is still a guide line on the amount of quotes that someone is supposed to seek at each level for a job.

5.    Claire Reilly talked about the handful of substantial changes to the document in more detail:

a.    An index had been added to the front of the document so as to make it easier to navigate.

b.    For clarity, plain English has been used and hyper-links have been used to further support information.

c.    The order of the document had changed to match the process, by placing more important information to the front of the document.

d.    The team had shaped governance around bands and framework for greater transparency.

e.    There has been an added section on concession contracts in line with legislation.

f.     Additional section around IR35 to mitigate the risks for HMRC regulations.

g.    Additional section around prevention of corruption, declarations of interest and organised crime. To try and make the Council more transparent and mitigate risks.

h.    There is still a section on sustainable procurement which has been re-worded for clarity.

i.      Addition of a guidance document to partner the CPR’s. Each of the rules are expanded to make it easier to understand and what officers should be doing.

6.    The CPR review would promote better compliance and transparency to mitigate the risk to the Council.

7.    The Chair thanked Paul Vernham and Claire Reilly for the report.

 

AGREED to approve and recommend the changes to the Contract Procedure Rules for inclusion within the Council’s Constitution.

 

330.

DWP IMPLEMENTATION OF UNIVERSAL CREDIT IN ENFIELD - COUNCIL READINESS PLAN - 20:30 - 20:45 pdf icon PDF 172 KB

To receive the report of the Executive Director of Finance, Resources & Customer Services providing the DWP Implementation of Universal Credit in Enfield.

 

Additional documents:

Minutes:

RECEIVED the report of the Executive Director of Health, Housing & Adult Social Care presenting the DWP Implementation of Universal Credit in Enfield – Readiness Plan.

 

NOTED

 

1.    The report was presented by Sally Mcternan (Assistant Director – Community Housing) and Sally Sanders (Head – Financial Assessment) and sets out the results of a recent workshop that took place recently in regards to the Council’s readiness for the implementation of Universal Credit (UC) in Enfield.

2.    The Department of Works and Pensions (DWP) are having a phased roll out of UC in Enfield. The initial roll out starts in November 2017 in post code areas EN1, EN2 and N9 plus 8 post codes. All other areas, the roll out starts in February 2018.

3.    This was not a Council administered benefit change but was being driven by Central Government. This is the Council’s readiness for the implementation of UC, looking at the duties that on behold on the Council once UC rolls out and housing benefit ceases to be administered by the Council.

4.    The Council is administering its readiness plan through a board structure. The board is chaired by James Rolfe (Executive Director – Finance, Resources & Customer Services, along with all projects management methodology to be undertaken in a risk workshop.

5.    The risk table (page 113) is attached to the readiness plan and the team have managed to mitigate the risks currently identified. Most of them mitigated to green. However, there are two risks that the team have not been able to mitigate to green which are:

a.    UC02 – Homelessness – impact around resources regarding the early stage of the rollout due to staffing levels at John Wilkes House.  The Homelessness Reduction Act, to be rolled out from April 2018, will address staffing levels and resources required to meet the legislative requirement. This was a medium risk at present, but as staffing issues would have been resolved by February 2018, then it is expected to be a green rating.

b.    UC04 – Debt Recovery – This was the most significant risk to the Council. The team have been unable to mitigate this risk away from a red rating. The Council will have a cash flow challenge as it waits for benefits to come through either as a result of an alternative payment arrangement or other arrangement with the tenants. The team were not confident to mitigate this risk beyond a red rating.

6.    The following comments, questions and issues raised in response to the report:

a.    The Chair re-iterated that the implementation of UC is a very serious situation residents will find themselves in. As a result, the council will have to deal with homelessness, debt recovery, etc. Concern raised about staffing levels at John Wilkes House to deal with UC rollout.

b.    Sally Mcternan clarified that there was a new process around rent collection, negotiated with Housing service colleagues, and are in the process of changing the way in which income recovery procedures work directly with tenants.  ...  view the full minutes text for item 330.

331.

MANAGING THE SAVINGS - 20:45 - 20:55 pdf icon PDF 414 KB

To receive the report of the Executive Director of Finance, Resources & Customer Services providing a Savings Monitor Update Report.

(Report No.87)

 

 

 

Minutes:

RECEIVED the report of the Director of Finance, Resources & Customer Services (No.87) presenting an overview of the savings monitoring process undertaken in determining the progress in achieving the savings for 2017/18.

 

NOTED

 

1.    The report was presented by Neil Goddard (Head – Budget Challenge).

2.    This report provided an overview of the Savings Monitoring Process for 2017/18 and the appendices included within the report reflect the latest position on the savings.

3.    As part of the Annual Budget setting process departments are required to find budget savings in order to balance the Council’s overall finances. At that point in time, finance categorise the savings in order of difficulty in achieving them using a traffic light system.

4.    As detailed at 3.3 (page 25) of the report, a summary of the savings is produced as part of the Revenue Monitoring Process. The progress in achieving these savings is then reviewed each month and are categorised so as to compare them to the original classification. For 2017/18, the team have tried to enhance that risk based approach by introducing a numbering system alongside the traffic light system to add an extra level of detail to enable the team to focus on the high risk savings.

5.    As part of the 2017/18 budget setting process, new savings which included increased income totalled £11.2M. The full year effects of previous year’s savings totalled £13.3M. Therefore, overall for 2017/18 the savings to be made totalled £24.5M. The appendices within the report (pages 29-31) summarise the latest position.

6.    Of the £24.5M, 11% of savings are categorised as blue and fully achieved, 54% are categorised as green and are on target, 19% are categorised as amber and 16% are categorised as red (as detailed at para 4.3 of the report).

7.    The savings classified as red or amber go through further scrutiny and challenge by using a pro-forma which the relevant budget manager is asked to complete. Managers are then asked the reasons for the red or amber risk classification i.e. are all alternative options being considered, are actions being taken to mitigate the risk.

8.    The following issues raised in response to the report:

a.    Appendix C (page 31) of the report highlights the remaining likely shortfall for the highest risk savings, as detailed in the last column of the table.

b.    Councillor Simon raised the issue of SEN Transport, listed in the table at Appendix C (page 31). This had been a savings shortfall for some time.

9.    The Chair thanked Neil Goddard for presenting the report.

 

AGREED to note the contents of the Savings Monitor Update 2017/18 and to refer the report to Cabinet as part of the September 2017 Revenue Monitoring Report.

 

 

332.

MINUTES pdf icon PDF 204 KB

Audit & Risk Management Committee

 

a.         To receive and agree the minutes of the Audit Committee meeting held on Thursday 28 September 2017, as a correct record.

 

 

b.         To note the update on actions identified at the last meeting.

 

 

Additional documents:

Minutes:

NOTED the progress update on actions identified at previous meetings.

 

AGREED that the minutes of the Audit & Risk Management Committee held on Thursday 28 September 2017 be approved and signed as a correct record.

 

 

 

 

333.

EXCLUSION OF THE PRESS AND PUBLIC

Minutes:

At this point of the meeting a resolution was passed to move the meeting to Part 2.

 

 

RESOLVED, in accordance with Section 100(A) of the Local Government Act 1972 to exclude the press and public from the meeting for the items listed on part 2 of the agenda on the grounds that they involve the likely disclosure of exempt information as defined in Paragraph 3 (information relating to the financial or business affairs of any particular person (including the authority holding that information) of Part 1 of Schedule 12A to the Act (as amended by the Local Government (Access to Information) (Variation) Order 2006).

 

·         Meridian Water Update from the Cabinet meeting held Monday 30 October 2017.

 

1.  Gary Barnes (Acting Executive Director of Regeneration & Environment) provided an update on the Meridian Water Regeneration Scheme.

 

 

334.

AUDIT & RISK MANAGEMENT COMMITTEE WORK PROGRAMME 2017/18 - 20:55 - 21:00 pdf icon PDF 179 KB

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.

 

Minutes:

RECEIVED and noted the Committee’s updated work programme for 2017-18.

 

NOTED

 

1.    To add the following to the Work Programme:

 

·         Meridian Water update reports

·         Quarterly Universal Credit Implementation reports

335.

DATES OF FUTURE MEETINGS

To Note the dates of future meetings:

 

Thursday 11 January 2018 – 07:30pm

Tuesday 7 March 2018

 

 

(All meetings to commence at 7.00pm unless otherwise agreed.)

 

Minutes:

NOTED the dates of future meetings:

 

Thursday 11 January 2018 – 07:30pm

Wednesday 7 March 2018

 

 

(All meetings to commence at 7.00pm unless otherwise agreed.)