Hounslow Council


Agenda and minutes

Venue: Committee Room 3, Civic Centre, Lampton Road, Hounslow. View directions

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

Items
No. Item

24.

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

Minutes:

There were only two Members present at 7pm. The start of the meeting was delayed until the arrival of Councillor Hearn at 7.25pm to form a quorum.

25.

Minutes of the meeting held on 22 September 2015 pdf icon PDF 126 KB

Minutes:

The minutes of the meeting held on 22 September 2015 were confirmed.

26.

Matters arising from the minutes

Minutes:

(a)      Minute 17, page 3, point 8

 

It was noted that the issues regarding the Community Investment Levy and S106 payments had been raised by Cllr Malhotra and should be attributed to him in the minutes. The Chair reported that he had written to the Director of Finance on the matter and had referred the response to the external Auditor for further advice.  It was noted that accountability around the expenditure of S106 contributions was a legacy issue as it was gradually being replaced by the Community Infrastructure Levy.

 

(b)      Minute 19, page 4

 

Councillor Sam Hearn wished to record his apologies as he had not been able to attend the mini-workshop on the self-assessment questionnaire.

27.

Audit Committee effectiveness - self-assessment pdf icon PDF 129 KB

Minutes:

See the report of the Head of Internal Audit and Investigation (agenda item 4).

 

Steve Tinkler, Head of Internal Audit and Investigation, introduced the report.

 

Members were keen to ensure that they had the opportunity to attend relevant briefings provided by external organisations. Gary McLeod, External Auditor, undertook to keep the Council informed of KPMG briefing sessions, including technical briefings which might be of interest to Audit Committee members.

 

Steve Tinkler confirmed that there was a robust process in place to track audit review recommendations. He confirmed that if he had any concerns about failure to implement recommendations he would report this to the Committee.

 

Members requested that a process to be developed at future meetings for regular discussion between the Audit Committee and Departmental Directors concerning the risk register and how they manage risk in their departments.

 

The Committee wished to revisit the possibility of having an Independent Member on the Audit Committee at a later time.  It was noted that it might be suitable to do this at the same time as consideration was given to new arrangements for appointment of external auditors which were likely in 2017 to require the establishment of an appointment panel which included a majority of Independent members.

 

Resolved -

 

(a)      That an Annual Report on the effectiveness of the Audit Committee should be presented by the Chair to the June meetings of Cabinet and Borough Council. The report should describe the activity of the Committee, outlining any key achievements and an assessment of how the Committee has provided value to the organisation. It should assess whether the Committee is fulfilling its terms of reference and that adequate consideration has been given to all core areas.  It would also pose the question as to whether the role and purpose of the Committee was understood and accepted across the Authority.

 

(b)      That the Chair, working with the Head of Audit and Investigation develop a mechanism to enable feedback on the performance of the Committee to be received and reported within the Annual report.

 

(c)      That the Committee should strive to ensure that all meetings are quorate and that there is, as far as possible, full attendance.

 

(d)      That a process be developed at future meetings for regular discussion between the Audit Committee and Departmental Directors concerning the risk register and how they manage risk in their departments.

 

(d)      That attendance at all future training sessions be mandatory with all members of the Committee being required to attend.

 

(e)      That the following suggested training program be approved:

 

Training Subject Area

Frequency

Delivery Style

Treasury Management

Annual

External Facilitated Training

Statement of Accounts Technical Update

Annual

Internal/External Audit

Risk Management Strategy Briefing

Annual

Internal

Counter Fraud/Corruption Update

Annual

Internal

Audit Committee/Scrutiny Roles and Responsibilities

Ad-hoc

Internal

Audit Committee Update Meetings

Ad-hoc

External Audit

Audit Committee Briefings delivered by LGA/London Councils

Ad-hoc

External

 

28.

Internal Audit progress report - quarter 2 (2015-2016) pdf icon PDF 185 KB

Minutes:

See the report of the Head of Internal Audit and Investigation (agenda item 5).

 

Steve Tinkler, Head of Internal Audit and Investigation, introduced the report.

 

He stated that he was continuing to work with departments to ensure that recommendations were fully implemented. He felt that the situation was improving. He confirmed he would bring any issues of concern directly to the attention of the Committee. He explained, in response to a question, that while there were manual controls on amendment to payroll records, it was good practice to run a regular exception report.

 

The Committee wished to thank the Audit team for good progress on the internal Audit Plan.

 

Resolved -

 

That progress in Quarter 2 of the 2015/2016 Internal Audit Plan be noted.

29.

Counter Fraud performance - quarter 2 (2015-2016) pdf icon PDF 105 KB

Minutes:

See the report of the Head of Internal Audit and Investigation (agenda item 6).

 

Steve Tinkler, Head of Internal Audit and Investigation, introduced the report. The shared service initiative was progressing well. Investment in developing staff skills in the area of counter fraud would improve the capacity of the service. He outlined some of the work undertaken this quarter. He stated he expected that the sanction target would be achieved by the year end.  In response to a question, he stated that the main area of procurement fraud related to fraudulently seeking to change bank mandates.

 

Resolved -

 

That progress in Quarter 2 of the 2015/2016 Counter Fraud Plan be noted.

30.

Quarterly monitoring of Corporate Risk Register pdf icon PDF 254 KB

Additional documents:

Minutes:

See report of the Head of Treasury, Pensions and Capital (agenda item 7).

 

Lorelei Watson, Head of Treasury, Pensions and Capital, introduced the report. She highlighted those areas where there had been a change to the risk level.  The overall direction of travel of risk was up slightly since the last quarter. In response to questions she gave the following additional information.

 

There was a report to Cabinet in October 2015 which set out an action plan for mitigating measures to resolve the risks around Temporary Accommodation. Proposals for taking forward the development of the new Civic Centre were considered by Cabinet in November 2015.  Risks to this project had been identified but were not considered significant enough for the project to be included on the corporate risk register.  The impact of refugees was not currently considered as a risk.  The Government had further delayed a decision on whether to build a third runway at Heathrow.  Changing the risk profile chart was unlikely to have a significant impact on “bunching” of the risk items.

 

Resolved -

 

That the amended Corporate Risk Register be noted.

31.

Treasury Management Strategy pdf icon PDF 229 KB

Additional documents:

Minutes:

See report of the Head of Treasury, Pensions and Capital (agenda item 8).

 

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

 

An annual service charge to Vinci was recorded on the balance sheet in respect of the Highways PFI contract.  There always tended to be slippage on the capital programme.  Officers did have access to consult an external Treasury Adviser. The Council did invest in overseas banks in, for example, Australia and New Zealand. These were AAA rated and the maximum amount was £30 million.  Although, in practice, usually a lot less. She noted the concern that the Council should not be over exposed in one particular country even if money was not held in the same institution. In practice this was not the case.

 

Resolved -

 

That the Audit Committee commends Borough Council

 

(a)    To adopt the:

 

(i)     Treasury Management Annual Strategy 

(ii)    Annual Investment Strategy (Appendix A)

(iii)    Statement on Minimum Revenue Provision (Appendix B)

 

(b)    To authorise the Director of Finance & Resources to:

 

(i)     Use short-term (temporary) borrowings.

(ii)    Use cash held in internal funds to offset the need to borrow externally.

(iii)    Use long-term borrowings subject to interest rates at the time of offer:

 

-     to take long-term loans, as required, from the Public Works Loan Board.

-     to take long term loans from the money market using any of the loan instruments available to the Council as deemed most appropriate at the time of borrowing.

 

(iv)   Invest temporary surplus cash, within constraints of normal cash flow considerations, with approved counterparties.

(v)    Maintain the approved counterparty list, making additions and deletions, and reviewing counterparty limits as necessary.

 

32.

External Audit - annual audit letter (2014-2015) pdf icon PDF 55 KB

Additional documents:

Minutes:

See report of the External Auditor (item 9).

 

Gary McLeod, External Auditor, introduced the report. He summarised the key headlines from the report. The adjustment of £20.6 million to the accounts related to the revaluation of land and buildings.

 

Resolved -

 

That the Annual Audit Letter for 2014/2015 be noted.