Agenda for Audit Committee on Friday, 16th September, 2016, 10.30 am

Agenda and minutes

Venue: LH 2.11 - Loxley House, Station Street, Nottingham, NG2 3NG. View directions

Contact: Catherine Ziane-Pryor  0115 8764298

Items
No. Item

27.

APOLOGIES FOR ABSENCE

Minutes:

Councillor Andrew Rule - leave

28.

DECLARATIONS OF INTERESTS

Minutes:

None.

29.

MINUTES pdf icon PDF 202 KB

Of the meeting held on 1 July 2016 (for confirmation)

Minutes:

Subject to the following amendment, the minutes of the meeting held on 1 July 2016 were confirmed as a true record and signed by the Chair:

 

Minute 16, KPMG External Auditors Update: ‘whilst the deadline for submitting accounts is the end of June, from May 2018 (not next year) this will be brought forward to the end of May.’

 

30.

TRAINING SESSION - STATEMENT OF ACCOUNTS pdf icon PDF 47 KB

Presentation delivered by Sue Risdall, Finance Team Leader, and Tom Straw, Finance Manager (Capital)

Minutes:

Sue Risdall, Finance Team Leader Technical Accounting, and Tom Straw, Senior Accountant Capital Programmes, delivered a training session to the Committee on the Statement of Accounts, a copy of the presentation is included in the agenda and referred to the following topics:

 

(i)  purpose and background;

(ii)  format of the Statement of Accounts;

(iii)  key issues this year;

(iv)  Treasury Management Strategy;

(v)  accounting for pensions;

(vi)  the Comprehensive Income and Expenditure Statement;

(vii)  what money was spent;

(viii)  Other Comprehensive Income and Expenditure;

(ix)  Balance Sheet;

(x)  Reserve Balance;

(xi)  understanding the types of reserves including useable (general and earmarked), and unusable reserves;

(xii)  Cash Flow Statement;

(xiii)  Capital Spend;

(xiv)  Supplementary Accounts;

(xv)  the Housing Revenue Account;

(xvi)  Collection Fund;

(xvii)  Group Accounts.

 

The Committee welcomed the training and thanked Sue Risdall and Tom Straw.

 

31.

STATEMENT OF ACCOUNTS 2015/16 INCLUDING THE KPMG EXTERNAL AUDIT REPORT 2015/16 pdf icon PDF 177 KB

Report of the Strategic Director of Finance

Additional documents:

Minutes:

Statement of Accounts 2015/16

 

Sue Risdall, Finance Team Leader Technical Accounting, Tom Straw, Senior Accountant Capital Programmes, and Theresa Channell,Head of Corporate Finance and Deputy Section 151 Officer, presented the Statement of Accounts and highlighted the following points:

 

(a)  there have been no major changes in the Statement of Accounts other than the report format which now provides a narrative following a change in the Code of Practice on Local Authority Accounting;

(b)  the Committee is asked to review and scrutinise the Statement to ensure it provides a fair and complete view of the Accounts;

(c)  the key issues identified this year include:

(i)  The impact of reduced Government funding;

(ii)  The short-term Treasury Management Strategy  in light of the EU referendum result;

(iii)  Pension Deficit  of £623m at 31 March 2016 (this is reviewed every 3 years to set contributions to ensure that the deficit can be cleared in 18 years’ time;

(d)  points highlighted within the Treasury management strategy included:

(i)  attitude to risk;

(ii)  reduction in long-term investment with more focus on short-term investment of a maximum of three months;

(iii)  significant increase in short-term investments to cushion the effects of the EU referendum.

 

Councillor’s questions were responded to as follows;

 

(e)  with the growing trend for some small businesses to attempt to avoid business rates or appeal them, consideration is given to local intelligence and monitoring of premises, including cafes which extend seating to use outdoor space. Monitoring can be difficult but popular software packages which identify business sites on roadmaps have proved invaluable to the Counter Fraud Team. The City Council cannot charge business rates on listed buildings. It is the responsibility of owners to inform the City Council of any changes such as when larger premises are been divided into smaller units.  However, changes in legislation and regulation will require a new approach;

(f)  Council Tax appeals are very different as appeals are usually lodged due to a change in circumstances. A specific team within Finance, liaise with the Counter Fraud Team and work to ensure the information provided in appeal is correct;

(g)  with regard to the level of general reserves set (£11 million), all reserves are set following comprehensive risk assessments and a range of consideration given to the level of cuts and savings required, medium-term financial plan, reductions central government grants, departmental issues. Currently set at 2-4% of the net budget received, this will be reduced on a sliding scale. The robustness of the budget and assessment of resources, signed off by the Strategic Director of Finance, is examined and the level of resources required considered, including watching the levels set by other local authorities. Is not advisable to use reserves for ongoing revenue expenditure. Finance team currently plan three or four years ahead on the Medium Term Financial Plan. The City Council needs to ensure that resources are available to enable transformation, sometimes by supporting short term funding gaps as grants are reduced/withdrawn, to enable changes to services to  ...  view the full minutes text for item 31.

32.

ANNUAL GOVERNANCE STATEMENT 2015/16 pdf icon PDF 113 KB

Report of Head of Audit and Risk

Additional documents:

Minutes:

Shail Shah, Head of Audit and Risk, presented the Annual Governance Statement 2015/16 and highlighted two additional ‘issues worthy of noting’ following Councillors’ discussions at the July Audit Committee meeting:

(i)  consideration of Blueprint Partnership Ltd and Robin Hood Energy;

(ii)  the Brexit Impact;

it is noted that there will be a further Annual Governance Statement update submitted to the February 2017 meeting of the Committee.

 

Next year the Authority will have to work to the new CIPFA/SOLACE Code so the presentation of the Annual Governance Statement will be in a different format.

 

Councillor’s comments included:

 

(a)  further information on Blueprint Partnership Ltd would be beneficial, particularly the opportunity to speak to the City Council’s regeneration specialist;

(b)  with monies still locked inside the Icelandic banks, a briefing update would be appreciated on the current situation.

 

RESOLVED tonote the report and approvethe Annual Governance Statement 2015/16 as attached to the report.

 

33.

RISK MANAGEMENT FRAMEWORK AND UPDATE pdf icon PDF 174 KB

Report of the Strategic Director for Finance

 

Additional documents:

Minutes:

Jane O’Leary, Insurance and Risk Manager, introduced the report which presents the Draft Risk Management Framework, and asks the Committee to consider it for approval.

 

Insurance and Risk are already working with key departments to refresh corporate risk registers and are satisfied that risk is considered and monitored but that processes will now need to comply to the framework.

 

Councillor’s comments and questions were responded to as follows:

 

(a)  the internal risk process within the framework does link to external partners in two ways as referred to within the report which may be better illustrated in the final framework document with the diagram;

(b)  the framework does not refer to external information as this is primarily covered by legislation;

(c)  transparency is important so citizens will be able to access the main body of the Corporate Risk Register;

(d)  with regard to the regularity of monitoring, Departmental Risk Registers are expected to be considered regularly at Departmental Leadership Team (DLT) meeting including identifying areas for improvement. Ideally consideration of risk should be part of the day-to-day work;

(e)  training the staff within each department  to use the framework is important;

(f)  within the hierarchy of risk responsibility, Members of the Executive Board need to be included;

(g)  included within the framework training is the importance of ensuring that partners, including supply chains, provide up to date information on changes which may impact and result in an element of risk to the City Council;

(h)  risk register and risk consideration training will be available for members of the Audit Committee;

(i)  further information will be sought with regard to the value of all City Councillors having access to ‘Covalent’.

 

RESOLVED to approve the Risk Management Framework and its delivery strategy, as set out within the report.

 

34.

EXCLUSION OF THE PUBLIC

To consider excluding the public from the meeting during consideration of the remaining item in accordance with Section 100A(4) of the Local Government Act 1972 on the basis that, having regard to all the circumstances, the public interest in maintaining the exemption outweighs the public interest in disclosing the information by virtue of Paragraphs 1 and 3 of Part 1 of Schedule 12A of the Act.

Minutes:

RESOLVED to exclude the public from the meeting during consideration of the remaining item in accordance with Section 100A(4) of the Local Government Act 1972 on the basis that, having regard to all of the circumstances, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

 

35.

EXEMPT MINUTE

Of the meeting held on 1 July 2016 (for confirmation)

Minutes:

The exempt minute of the meeting held on 1 July 2016 was confirmed as a true record and signed by the Chair.