Agenda and minutes

Councillor Maria Joanna  - Work Commitments

Councillor Eunice Regan   - Personal

In the interests of transparency, Councillor Michael Edwards highlighted that he was a member of a board on a community organisation which is a major user of a community centre being actively reviewed by the Council. He would not make any points in relation to this. This did not preclude him from speaking on any item.

In the interests of transparency, Councillor Andrew Rule highlighted that he attended the committee meetings at Park Gate Community Centre. This did not preclude him from speaking on any item.

In the interests of transparency, Councillor Sajid Mohammed highlighted that he was a director of an organisation which had a temporary lease for a community centre. This did not preclude him from speaking on any item.

To confirm the minutes of the meeting held on 28 June 2024

The Minutes of the meeting held on 28 June 2024 were confirmed as a true record and they were signed by the Chair.

The Chair presented the Committee’s Work Programme for the 2024/25 Municipal Year. The following points were discussed:

a)  Once the Improvement Plan has been approved by City Council the Chair and officers will assess what should be brought to Committee for it to receive assurance on progress and oversight.

b)  Due to workload there will be an additional meeting scheduled for 06 September 2024.

The Chair presented the Committee’s Recommendation Tracker and the latest responses received to its recommendations.

The Committee noted the Recommendation Tracker.

Report of the Corporate Director for Finance and Resources

The Chair presented a report on the revised Terms of Reference for the Audit Committee. The following information was highlighted:

a)  As part of the Audit Committee Improvement Plan one of the action was to resfresh and revise the Committee’s Terms of Reference to bring it in-line with the CIPFA 2022 guidance.

b)  The revisions do not change the remit of the Committee, its objectives, or the day-to-day operations of it.

Resolved to endorse the revised Audit Committee Terms of Reference for approval at Council.

Report of the Corporate Director for Growth and City Development

Nicki Jenkins, Director of Economic Development and Property, and Beverley Gouveia, Head of Property, presented a report which set out progress made on implementing Theme 2 (Asset Rationalisation) of the Together for Nottingham Plan and related IAB instruction 2.8. The following information was highlighted:

a)  The report sets out the closing down of the Asset Management theme that was in the together for Nottingham Plan and the IAB instruction relating to Asset Rationalisation.

b)  The Asset Management theme within the Together for Nottingham Plan focussed on three priorities: the expansion of capital receipts, improve the assurance of governance around disposals, and the implementation of the corporate landlord model for property management.

c)  The IAB instruction went further which instructed to further increase the pipeline of capital receipts.

d)  The Council has a strong record of delivery and performance in regards to delivery of capital receipts over the four year period, which showed an increase of delivery where the target was met in all but one year. Over the four year plan over £80 million of capital receipts has been secured.

e)  The Together for Nottingham Plan and IAB instructions pre-date the Section 114 Notice and approval of Exceptional Financial Support (EFS). The Council will need to pay back EFS through the delivery of capital receipts. As such work continues on identifying a pipeline of capital receipts through a disposals programme and is a theme within the Council’s Improvement Plan. Work is being done to ascertain the necessary timeframes for delivery and to accelerate the pipeline. This will be reported back to the Committee at a future meeting.

The following points were raised in discussion:

f)  The Committee queried how the Council achieved best value when it was disposing of assets. It was explained that best value was achieved throughout the process which included competitively pricing external agents through quotes, using the expertise of internal officers, and looking at the market value of the property to determine the price. Members noted that properties were achieving market value and in some cases achieving above market value.

g)  Members discussed Exceptional Financial Support (EFS) and the importance of generating capital receipts in order to pay that back. It was explained that within the current financial year the amount of EFS needed is around £41 million, and there is forecast to be a £25 million contribution from capital receipts towards returning EFS. The rest will need to paid for by temporary borrowing. The capital receipts expected to be generated in 2025/26 from the pipeline will pay off the remaining element of EFS from this financial year.

h)  It was clarified that properties were assessed on an individual basis as to whether they were sold by Council officers or outsourced for external agents to sell. If it was a specialised building it may require specific expertise which the Council did not have. It could also depend on market value or the capacity within the Team. Marketing reports are received prior to a property going to  ...  view the full minutes text for item 25.

Report of the External Auditor

Andrew Smith, representing the Council’s External Auditors Grant Thornton, presented a report which provided the Committee with an update on progress on delivering its responsibilities as external auditors. The following information was highlighted:

a)  Good progress has been made with the 19/20 accounts and it is hoped that a report will be brought to the Committee’s September meeting.

b)  The auditors are awaiting further clarification but it is likely that the backstop dates could be pushed back to mid-December in respect of the 2021/22 and 2022/23 audits.

c)  The Council will need to publish its outstanding accounts prior to the backstop dates, and it was clarified that it did not have to wait until the completion of the 19/20 audit to do this.

d)  Planning work is being done towards the 2023/24 accounts and a number of queries have been made to the Council and initial steps were outlined to the Committee.

The following points were raised in discussion:

e)  The Council was cautious of publishing accounts before the 2019/20 accounts had been finalised due to the issues identified during that year, and the potential for changes needing to be made to future accounts. 

f)  Public inspection dates had been established for the 2021/22 accounts and future years prior to the backstop dates. The Council needed assurance that the opening balances were correct and to do this it needed for the 2019/20 accounts to be finalised.

g)  There was a consensus that the Council and Nottingham residents were not getting good value from its external auditors. The Chair would be writing a letter to the relevant authorities outlining the Council’s concerns.

h)  A backstop disclaimer opinion will be placed on the accounts that are unable to be completed. As such, full assurance cannot be given on the opening balance for the 2023/24 accounts due to limited procedures.

Resolved:

1)  For the Chair to write to the relevant authorities outlining the Council’s concerns in regards to the performance of the external auditors.

2)  To note the External Audit Update.

Report of the Corporate Director for Finance and Resources

Glen Hammons, Interim Finance Lead – Technical Finance presented a report which provided an update on the Statement of Accounts. The following information was highlighted:

a)  In regards to the 2019/20 accounts, the Council has responded to all queries and a revised set of accounts were submitted to Grant Thornton in November who are currently progressing through their quality assurance processes.

b)  Revised draft accounts have been completed for the 2020/21 accounts and this was done in December 2023.

c)  Draft accounts were completed in May 2024 for the 2021/22 accounts.

d)  Draft accounts for the 2022/23 accounts are expected to be completed in August 2024.

e)  The draft accounts need to go out for public inspection and this inspection period lasts for 30 working days. The 2020/21 and 2021/22 accounts are in a position to be put forward for the public inspection and the 2022/23 accounts will then follow.

f)  In order to move the accounts into the public inspection process it is proposed that in advance of that there will be consultation done with the Audit Committee Chair to ensure that Audit Committee have been engaged prior to the draft accounts being release for inspection.

g)  Based on current expectations, the accounts for 2020/21 and 2021/22 could meet the September backstop if it was in place. The 2022/23 accounts are unlikely to meet the September backstop date. This is all, however, subject to further risks and the potential for the backstop date to be pushed back.

h)  The preparation of the 2023/24 accounts will begin once the 2022/23 draft accounts have been completed. The report set out the indicative timelines but there are a number of risks to these, particularly with completing the audit opinion for the 2019/20 accounts, backstop dates, and staffing capacity.

The following points were raised in discussion:

i)  The Section 151 Officer is required to give a true and fair opinion on the draft accounts prior to them being released for public inspection.

Resolved:

1)  To take assurance the current position with the Statement of Accounts for the years 2019/20 through to 2023/24.

2)  To note the impact on the Council in meeting the proposed national backstop date due to external audit opinion for the draft 2019/20 Statement of Accounts scheduled to be presented to Audit Committee in September 2024.

3)  To take assurance from the indicative timeline and associated risks for publishing the Statement of Accounts for financial years 2019/20, 2020/21 and 2021/22 to meet the proposed national backstop dates as set out in Section 3.6 of the report.

4)  To note that, from the revised indicative timeline and associated risks draft Statement of Accounts for the financial year 2022/23, will not meet the proposed national backstop date as set out in Section 3.6 and a revised timeline has been identified.

5)  To take assurance from the progress, indicative timeline and associated risks for publishing the Statement of Accounts for financial year 2023/24 as set out in Section 3.7 of the report.

6)  ...  view the full minutes text for item 27.

Report of the Chief Executive and of the Coprorate Director for Finance and Resources

Debbie Bowring, Corporate Assurance and Risk Manager was present at the meeting to provide an update on the Corporate Risk and Assurance Register. The following information was highlighted:

a)  Further details would be provided on the register during the exempt session.

b)  The risks and existing mitigations have been reviewed through performance clinics and individual meetings with risk owners for Q4.

c)  Work is currently underway to assess the Council’s Improvement Plan and areas of priority for risk management to further embed and support the Council’s improvement journey which will include further development and training for officers and Members and refresh of corporate risks.

After discussion early in the meeting the committee felt it necessary to call an additional meeting to consider the 19/20 audit opinion.

Resolved to meet on 06 September 2024 at 09:30am.

To consider excluding the public from the meeting during consideration of the remaining item(s) 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. 

The Committee decided to exclude the public from the meeting during consideration of the remaining agenda item(s) 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 outweighed the public interest in disclosing the information, as defined in Paragraph(s) 3 of Part 1 of Schedule 12A to the Act.

Report of the Chief Executive and of the Corporate Director for Finance and Resources  

Debbie Bowring, Corporate Risk and Assurance Manager, presented the exempt appendices to the report providing an update on the Corporate Risk and Assurance Register.

Following discussion, the committee made resolutions as set out in the exempt minutes.

The Chair presented the Committee’s exempt Recommendation Tracker and explained that further updates on these will be requested for the Committee’s September meeting.

The Committee noted the tracker.

To confirm the exempt minutes of the meeting held on 28 June 2024

The exempt Minutes of the meeting held on 28 June 2024 were confirmed as a true record and they were signed by the Chair.