Hounslow Council


Agenda and minutes

Venue: Committee Room 1, Civic Centre, Lampton Road, Hounslow. View directions

Contact: Mike Smith telephone: 020 8583 2069; email:  mike.smith@hounslow.gov.uk 

Items
No. Item

42.

Apologies for absence, declarations of interest or any other communication from Members

Minutes:

Councillor Sam Christie participated in the meeting via a conference call connection.

 

It was noted that Senior Counsel’s advice had been received that remote participation could only be informal and that a Councillor participating in such a manner could not vote or count towards the quorum of the meeting. There were concerns expressed that this position did not reflect the reality of modern technology and meeting arrangements. Councillor Malhotra requested a copy of the Counsel’s opinion and indicated his view that a change should be sought to this position.

 

Councillor Sam Hearn declared that he had been approached by the person who had made a formal objection to the accounts.

43.

Minutes of the meeting held on 17 February 2014 pdf icon PDF 53 KB

Minutes:

The minutes of the meeting held on 17 February 2014 were confirmed.

44.

Matters arising from the minutes

Minutes:

With reference to minute 35, Councillor Hearn stated that the minute as it was written did not fully capture his concern. He wished to receive assurance that purchase orders were being raised at the time of ordering and not at the time of payment. Steve Tinkler, Head of Audit, confirmed that this could be addressed as part of the next audit of the purchase order system.

 

With reference to Minute 38, it was confirmed that the fraud risk profile would be reported to the December meeting of the Committee.

45.

Annual Governance Statement pdf icon PDF 69 KB

Additional documents:

Minutes:

See the report of the Assistant Director, Strategic Finance (agenda item 4).

 

Clive Palfreyman, Assistant Director, Strategic Finance, introduced the report. He summarised the trends and significant changes in the risks facing the Authority.  He stated that this was set out in more detail in the Risk Register which was reported to the Committee on a quarterly basis. Councillor Dennison commented that some risks would also be identified as financial pressures and accounted for in the Council’s financial strategies.

 

Clive Palfreyman explained that the final Annual Governance Statement would be formally signed by the Chief Executive and the Leader of the Council. It also formed part of the accounts of the Authority which were examined by the External Auditor. The External Auditor provided negative assurance on the Statement. It was not the practice to present the Statement to Borough Council although this was done in some authorities. Councillor Curran noted that consideration of the statement was delegated to the Audit Committee and Borough Council did not have the capacity for detailed consideration of Audit matters. He did however concur with the Committee that an Annual Report on Audit Committee matters should be made to Borough Council.

 

Resolved -

 

That the Annual Governance Statement for 2013-14 be approved and that the Leader of the Council and the Chief Executive be recommended to sign it on behalf of the Council.

46.

Statement of Accounts pdf icon PDF 85 KB

Additional documents:

Minutes:

See the report of the Assistant Director, Strategic Finance (agenda item 5).

 

Clive Palfreyman, Assistant Director, Strategic Finance, introduced the report. He stated that no substantive issues had been raised by the External Auditor. Councillor Malhotra stated that he had not been able to attend the Briefing Meeting for Members and requested that the meeting arrangements be reconsidered for next year. Clive Palfreyman stated that Notice of Objection to the accounts received by a member of the public would delay the formal certification of the accounts and there would be a formal examination process for the External Auditor to undertake as a result of the objection. He did not believe that the nature of the objection affected the accuracy of the accounts. It related to a legal matter.

 

The following adjustments to the Statement of Accounts were reported:

 

- on page 73, the first line should refer to the 2013/2014 year and not 2012/2013

 

- on page 148, the entry in the column of the net gains and losses table headed ‘Fair Value through Profit and Loss’ should be £12.9 million and not £9.7 million.

 

Resolved -

 

(a)      That the Council’s Statement of Accounts for 2013-14 be approved and the Chair of the Audit Committee be authorised to sign the accounts.

 

(b)      That the update on a Notice of Objection to the 2013-14 Accounts received from a Hounslow resident be noted.

47.

External Audit - Annual Governance Report pdf icon PDF 58 KB

Additional documents:

Minutes:

Tony Crawley, External Auditor, introduced the report. He gave a further explanation of how he would review the objection to the accounts received from a local resident. He would look at the accounting treatments and the lawfulness. He would consider the matters raised and would consider the elector’s request to produce a report in the public interest. In the meantime, he would not withhold his audit opinion and value for money opinion as the matter was not material. He explained that he would be withholding the audit certificate to enable the further work to take place. He stressed that the review of the objection would need to be undertaken properly and seriously. It was a legal process. He would determine the objection and give a statement with reasons if appropriate. There was an opportunity for appeal to the High Court in certain circumstances. The Audit Commission would be involved in the process. The target time to complete the process was 9 months. Some objections were resolved within weeks and others went on for a number of years.

 

In response to a query from Councillor Sam Christie in relation to the Annual Governance Statement, Clive Palfreyman stated that Hounslow Homes Accounts were part of the consolidated accounts and the External Auditor did examine them in totality. Tony Crawley, External Auditor, stated that it was a matter for the Council to decide whether to disclose any issues around the Hounslow Homes Accounts. Councillor Hearn suggested that the matters of concern with Hounslow Homes were a Corporate Governance failure rather than a material accounting failure. Clive Palfreyman felt that it was a discretionary matter and he was content with the approach taken and did note that the investigations regarding Hounslow Homes had not yet concluded.

 

Gary McLeod, External Auditor, went on more generally to summarise the Auditor’s report. He stated that the External Auditors had an unqualified opinion on the Authority and the Pension Fund accounts and had confirmed the Annual Governance Statement as being consistent with their understanding. He confirmed that all 3 of the matters referred to in his report requiring completion had now all been resolved. He confirmed that he had discussed the outcome of the audit of the Hounslow Homes accounts with their external auditor. He reported that no issues had been indentified in terms of the actuarial valuation of the Local Government Pension fund for Hounslow, nor with respect to business rate localisation. There was a grammatical correction on page 8 of the audit report, and he reminded the Committee of the Declarations on page 10 of the report. He referred to the fact that there were some minor recommendations. In response to a question, Steve Tinkler, Head of Audit, confirmed that improvements to purchase order arrangements continued to be a matter under Audit review.

 

The final signing of the accounts and approval of any late changes were delegated to the Chair of the Committee and the Section 151 Officer. However, the other  ...  view the full minutes text for item 47.

48.

Local Code of Corporate Governance pdf icon PDF 61 KB

Additional documents:

Minutes:

See the report of the Lead Member for Corporate Performance and Customer Care (agenda item 7).

 

Richard Gruet, Assistant Director, Corporate Governance, introduced the report.

 

Councillor Malhotra was pleased to see the emphasis on assurance. Councillor Sam Hearn raised a query regarding clarity and accountability of delegated officer decision making. Richard Gruet agreed to engage in a more detailed discussion with Councillor Hearn. He would also provide further information to Councillor Hearn about public engagement on risk management.

 

Resolved -

 

That the revised code of Corporate Governance be noted and commended to Borough Council for adoption.

49.

Annual Review of the Risk Management Strategy pdf icon PDF 71 KB

Additional documents:

Minutes:

See report of the Lead Member for Finance and Engagement (agenda item 8).

 

Lorelei Watson, Head of Treasury, Pensions and Capital, introduced the report. In response to questions she gave the following additional information.

 

The responsibility for monitoring of risks rested with the risk owner and was usually undertaken on a monthly basis. There would be a process within each department which was overseen by the Director. Training was provided for relevant officers and the internal audit process provided assurance that an appropriate risk management structure was in place. At a corporate level, the regular quarterly corporate risk register report to the Audit Committee provided an opportunity for Members to examine more closely issues regarding risk management which they felt deserved further consideration. There was linkage between the risk register and the internal audit process.

 

A request was made that the annual monitoring report on the whistle blowing policy due to be made to the December meeting of the Committee should include consideration of whistle blowing arrangements in externalised services.  It was also felt that whistleblowing should be included as one of the risk prompts in appendix 3 to the Risk Management Strategy.

 

Resolved -

 

That the Risk Management Strategy set out at appendix A to the report be approved subject to including whistleblowing as one of the risk prompts in appendix 3.

50.

Updating the Contract Procedure Rules and Financial Regulations pdf icon PDF 103 KB

Additional documents:

Minutes:

See the joint report of the Lead Member for Corporate Performance and Customer Care and the Lead Member for Finance and Citizen Engagement (agenda item 9).

 

Clive Palfreyman, Assistant Director, Strategic Finance, introduced the report. He confirmed that there had been consultation with schools. There had been no major changes to the Financial Regulations. There were some changes to thresholds. There had been more substantial changes to the Contract Procedure Rules which now reflected the centralised Supply Chain Management approach and the use of paperless systems.

 

It was noted that there appeared to be some inconsistency in financial thresholds between the Contract Procedure Rules for the Council and that being proposed for schools. It was felt that there should be consistency between schools and the Council. It was confirmed that the financial regulations for schools addressed the previous concerns regarding unofficial funds. Clive Palfreyman explained that the block write-off of debts consisted mainly of small amounts of Council Tax individual debts. Any larger debts tended to be those arising from companies. Where the Council was responsible for managing the financial affairs of social care clients, assets were held in separate bank accounts. The Agresso System did ensure segregation of duties. The same individual could not both order and authorise purchases. The Supplier Management Team maintained a list of suppliers and did undertake reviews of the procurement process for specific areas in the Council. Member involvement occurred through the annual procurement plan, which was signed off at Cabinet and subject to quarterly updates. There was an agreed risk-based approach to setting the level of decision-making on purchasing matters.

 

Councillor Hearn referred to the fact that there were over 40,000 items in the Gunnersbury Museum, which had a financial as well as cultural value and he suggested that account should be taken of such assets in the possession of the Council. It was requested that the accountability for virement of capital should be consistent with that of revenue and in particular the Cabinet or the Lead Member should be notified of virements. Clive Palfreyman confirmed that Regulation 3.19 concerning emergency funding was linked into procedures in the disaster recovery plan.

 

Resolved

 

That subject to the following comments, the Contract Procedure Rules, Financial Regulations and Schools Financial Regulations be commended for adoption:

 

- That there be consistency of authorisation level between the contract procedure rules of the Council and schools.

 

- That account should be taken of the financial value of historic artefacts.

 

- That both capital and revenue virement treatments should be consistent.

51.

Anti Money Laundering Policy pdf icon PDF 71 KB

Additional documents:

Minutes:

See report of the Assistant Director, Strategic Finance, (agenda item 10).

 

Resolved -

 

That the Anti-Money Laundering policy be approved and that the Head of Internal Audit be designated as the Money Laundering Reporting Officer.

52.

Internal Audit Progress Report pdf icon PDF 249 KB

Minutes:

See report of the Head of Internal Audit and Investigations (agenda item 11).

 

Steve Tinkler, Head of Audit and Investigations, introduced the report.

 

Concern was expressed by Members that no response had been received in the case of 16 audit recommendations as to whether they had been implemented or not. It was felt that the officers responsible should be held to account and it was requested that consideration should be given in the future to setting up an escalation procedure for non-implementation of Audit recommendations. In the meantime, Steve Tinkler undertook to investigate these particular non-responses further and would report in more detail to the December meeting of the Committee. Tony Crawley, External Auditor, stated that, in some Local Authorities, officers were required to attend the Audit Committee automatically to account for outstanding recommendations.

 

In response to a question from Councillor Hearn, Clive Palfreyman, Assistant Director, Strategic Finance, stated that the joint audit arrangement with Ealing was specifically designed to drive up quality, identify and tackle these sorts of issues.

 

The report was noted.

53.

Counter Fraud Performance Report April 2014 - August 2014 pdf icon PDF 152 KB

Minutes:

See report of the Assistant Director of Strategic Finance (agenda item 12).

 

Clive Palfreyman, Assistant Director, Strategic Finance, introduced the report. He confirmed that the Hounslow Homes investigation was still ongoing. He also confirmed that the existing staff in the Anti-Fraud team would be retained and deployed on non-housing benefit fraud related matters when the Single Fraud Investigation Service was established on 1 October 2014. There were some concerns over the capacity of the new investigation service which would be available from the DWP.

 

The report was noted.