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

13.

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

Minutes:

Apologies had been received from Councillor Colin Ellar.  Councillor Elizabeth Hughes apologised for lateness.

 

There were no declarations of interest.

 

[Councillor Elizabeth Hughes arrived]

14.

Minutes of the meeting held on 22 June 2015 pdf icon PDF 84 KB

Minutes:

The minutes of the meeting held on 22 June 2015 were agreed as a true and accurate record and were signed by the Chair.

15.

Matters arising from the minutes

Minutes:

There were no matters arising from the minutes.

16.

External Audit: Annual Governance Report pdf icon PDF 62 KB

Additional documents:

Minutes:

Clive Palfreyman reminded members that the Final Annual Statement of Accounts was brought to the Audit Committee in September each year for approval.  KPMG had audited the accounts, and had given positive assurances.  He reminded members that an informal meeting of the Audit Committee had been held before Borough Council on 15 September 2015 to initially examine the accounts, which were now before members for formal approval.  Clive Palfreyman reminded members that from 2017, the presentation of accounts would happen earlier in the year, due to revised Governmental requirements.

 

The Chair then asked KMPG representatives to present their Annual Governance Report.

 

Gary McLeod informed Members that the opinions of KPMG on the accounts were clean and unqualified.  There had been three audit adjustments identified, all of which had been posted.  Three recommendations had been raised – none of which were high priority – and these had all be accepted by management.

There were four key financial statements audit risks identified (page 252 of the Agenda Pack).  These were:

§         Accounting for Local Authority (LA) maintained schools

§         Implementation of a new payroll system

§         Transfer of Hounslow Homes to the Council

§         Local Government Pension Scheme (LGPS) reform.

Additional audit effort had been given to these areas; conclusions had been positive.

Members were advised that the Annual Governance Report letter would be received after the final check by KPMG, but before the deadline of 30 September 2015.  The “value for money” statement was also confirmed as positive.

Gary McLeod drew the attention of Members to pages 263 to 265 of the Agenda pack, which listed the key issues and recommendations, and the required audit adjustments.

Q:  Cllr Hearn asked if the Committee Members would see the Report letter.  Tony Brown confirmed that he would be happy to circulate this. 

 

Noted:

Members noted the ISA260 report on the LBH accounts and the Hounslow Pension Fund, dated 14 September 2015.

17.

Statement of Accounts 2014-2015 pdf icon PDF 94 KB

Additional documents:

Minutes:

Clive Palfreyman led Members through his report (attached at Item 4 of the Agenda), highlighting the following points:

a)           Point 3.3 and 3.4 – All outstanding issues had now been addressed and completed.

b)           Point 4.2 – “September 2014” should be amended to “September 2015”.

 

In response to questions raised on the Statement of Accounts for the year ended 31 March 2015 (pages 13 – 155 of the Agenda Pack), the following information was provided:

 

1.      Page 17 – Highways PFI:  Hounslow’s PFI was negotiated at a low fixed interest rate in January 2013.  There were no concerns about this; Hounslow was in a better position than many Local Authorities.

2.      Page 18 – Outlook for 2015/16 and beyond:  Although there had been significant pressure in respect of Looked After Children in recent years – and this area was currently overspent by a projected £1m – the Council had a healthy level of reserves, and had reasonable mitigation in place. This was a feature on the Key Cabinet Financial Risks register.

3.      Page 24 – Cost of Services:  The large increase between 2013/14 and 2014/15 was due to the revaluation of HRA stock, with the percentage change in market value.  Exceptional revaluation movement difference related to a downward revaluation of school sites.

4.      Page 31 – Accruals of income and expenditure:  Although untaken annual leave had to be accounted for, this was a paper exercise, with no risk.

5.      Page 35Note 10 Termination Benefits:  This related to severance payments.  Pension fund transfers were included in the wider employer costs.

6.      Page 42Deficit in the LBH Pension Fund Scheme: The deficit was monitored at each meeting of the Pension Fund Panel. It would be adjusted in the triennial review in 2016.

7.      Page 53 – Adjustments involving the Pensions Reserve:  This was the difference between cash flow and the actuary cost.

8.      Page 72 – Note 36 Long-Term Creditors:  S106 monies were managed by the Planning Department, which was not a concern to the Finance Department.  Approval of S106 projects were approved and signed off by the Lead Member for Finance and Citizen Engagement.  Members expressed a desire to meet with the Interim Planning Policy Team Leader outside this meeting, in order to obtain further information.  Members were advised that the correct convention had been followed in the accounts for this, and was consistent with past practice.

9.      Page 83 – Post Employment Benefits; The Local Government Pension Scheme:  Lorelei Watson confirmed that there were adequate funds for immediate liabilities.  More details would be included in the Actuarial paper to be taken to the Pension Fund Panel.

10.Page 118 – Net (Additions)/Withdrawals from Dealings with Members: [Afterminute: this should read “Net Additions/(Withdrawals) from Dealings with Members; figures were correct]

11.Page 123 – Management Expenses:  these were the costs of running the scheme, including costs for Capita, adviser, actuary, LBH staff and KMG audit.  Details would be covered in the Pension Fund  ...  view the full minutes text for item 17.

18.

Annual Governance Statement 2015 pdf icon PDF 70 KB

Additional documents:

Minutes:

Clive Palfreyman reminded Members that they had seen the draft Annual Governance Statement 2015 at their June 2015 meeting, and confirmed that there was no material change.   It was noted that the date in 16.1 should be changed from “September 2014” to “September 2015”.

 

Members were asked to approve the statement, and recommend that it be signed, on behalf of the Council, by the Leader and Chief Executive. 

This was proposed by Councillor Malhotra, seconded by Councillor Hearn, and carried.

 

Resolved that:

The Annual Governance Statement for 2014/15 be approved and recommended for signing by the Leader of the Council and the Chief Executive on behalf of the Council.

 

The Chair thanked KPMG for their work in respect of the audit of the accounts.

19.

Audit Committee effectiveness assessment pdf icon PDF 179 KB

Minutes:

Steve Tinkler commended the report for consideration by Members; he advised them that most items had previously been raised.

 

Members reviewed the self-assessment of good practice questionnaire, and agreed that they would benefit from a mini-workshop, which they requested Steve Tinkler organise and facilitate.  Members confirmed that they were committed to undertaking training, to enable them to add value to the Committee.

 

Resolved that:

A mini-workshop be arranged by Steve Tinkler for Audit Committee members, at a mutually convenient time and date, preferably before the end of 2015.

20.

Risk Strategy and quarterly monitoring of Corporate Risk Register pdf icon PDF 181 KB

Additional documents:

Minutes:

Lorelei Watson led members through the Risk Register.

 

In response to questions raised, the following information was provided:

1.      Risk of the relocation to the new Civic Centre: This was not yet on the Risk Register; REDe, and the Civic Centre Board, owned this risk – the major risk related to the delivery of housing.

2.      Risk of the impact on Hounslow from refugees and migrants from continental Europe: this was not yet on the Risk Register.  Members were reminded that the risk register was for the quarter ended 30 June 2015; the risk would be considered for inclusion for the next quarter.

3.      Page 185 – Risk 11 – temporary accommodation costs: it was noted that this could become part of the risk of the potential increase in refugees and migrants.  The report due on the Council’s Homeless Strategy should expand on this.  It was noted that some London Boroughs were moving to become Corporate Landlords.  Clive Palfreyman informed Members that there was a plan in place to increase provision, which would be sent out by the Lead Member.  Members were concerned that the problem might be compounded if neighbouring boroughs bought properties in Hounslow to use as temporary accommodation.

4.      Page 210 -  Risk 19 – Heathrow night flights/expansion:  The final decisions would be taken at the end of 2015; there was a concern at the lack of infrastructure.  Once the final decisions were known, the Risk Register should be reviewed.

 

Members noted that the Corporate Leadership Team review the Risk Register, which is then signed off by the Lead Member for Finance and Citizen Engagement, before it is brought to the Audit Committee for approval.

 

 

Resolved that:

The refreshed Risk Management Strategy (at Appendices 3 and 4 of Agenda item 8) be approved.

 

Noted:

Members noted the amended Corporate Risk Register (at Appendix 1 of Agenda item 8), and thanked Lorelei Watson for her report.

 

 

21.

Internal Audit progress report pdf icon PDF 227 KB

Minutes:

Steve Tinkler advised Members that his report detailed progress made against the Audit Plan in the first quarter of 2015/16, including those items carried forward from 2014/15.  Appendix C of his report provided details on the progress against recommendations on fleet and fuel management.

 

In response to question raised on the “Partially Implemented Recommendations” table in Appendix C of the report, the following information was provided:

1.      Due dates:  Issues were being tracked; those stating “ongoing” had no firm date, but were being continually monitored.

2.      Recommendation 10 – Drivers Handbook:  The deadline for this has been delayed, as the implementation of it may impact on employee terms and conditions.  This is currently out for consultation with Unions. Members asked that an update is given to the Chair as soon as the matter is completed.

3.      Fleet and Fuel Management Audit: Steve Tinkler confirmed that the Audit report had highlighted strategic areas of failure and inefficiencies that needed to be addressed.

 

 

Appendix C, Recommendation 10 – Driver’s Handbook

Members asked Steve Tinkler to provide a brief update on this item to the Chair prior to the next Audit Committee meeting.

 

Noted:

Members noted the Internal Audit progress report.

22.

Counter Fraud performance report pdf icon PDF 121 KB

Minutes:

Steve Tinkler advised Members that the Appendix to his report identified the fraud risks to the Council.  He reminded Members that the Hounslow Team had been TUPE’d to LB Ealing, and confirmed that it had been a smooth transition.  The combined team worked well as a shared service.

 

Three members of the team had completed training through the National Crime Agency, and were now accredited financial investigators, working using the Proceeds of Crime Act.  There was a need for ongoing professional development, in order to keep up with changes in legislation.

 

Clive Palfreyman confirmed that the joint team was providing value for money.  As Brent had now joined Hounslow and Ealing, it was hoped to improve results even more.  He asked the Committee to note that there was no capacity for further expansion at the current time, but that it was important to build this in for the future.  Members expressed their support of the team.

 

Noted:

Members noted the Counter Fraud Team Quarter 1 Performance Report 2015/16.

23.

Urgent business

Any other items which the Chair accepts for consideration on the grounds of urgency 

Minutes:

There were no items of urgent business.

 

The date of the next scheduled meeting is 8 December 2015 at 7pm.