Basingstoke & Dean Borough Council Audit and Accounts Committee Meeting

Apologies were received from Councillor Falconer.

Councillor Gaskell was replaced by Councillor Mummalaneni.

There were no declarations of interest.

Councillor Falconer was provisionally appointed as Vice-Chair subject to his acceptance at the next meeting of the Committee. 

There were no urgent matters.

The minutes of the meeting held on 6 March 2023 were confirmed by the Committee and signed by the Chair as a correct record. 

The Senior Auditor introduced the report which informed members of the Audit and Accounts Committee of the work completed by the Internal Audit Team during the period March to July 2023 and the current position with all audit recommendations.

The Committee discussed the report and made the following comments:

• Queried certain outstanding audit recommendations regarding overdue original target dates and their categories of high risk. The Senior Auditor clarified that target dates were monitored on a regular basis and only extended when necessary.
• Asked whether there had been any updates to the contract standing orders audit. The Executive Director clarified that the contract standing orders had been reviewed as part of the Constitution update and that it was expected that proposals would be brought to the October Council meeting.
• Requested that a written response on the proposed changes to  contract standing orders be circulated to the Committee.

Resolved: The Committee note the report.

The Chief Internal Auditor introduced the report which provided the Committee with the annual opinion on the effectiveness of the council's risk management, control, and governance process for 2022/23.

The Committee discussed the report and made the following comments:

• Enquired about the capacity of the audit team to complete their work. The Chief Internal Auditor stated that he was confident the team had the mechanisms in place to complete the Internal Audit Plan.
• It was queried how risks were prioritised when forming the Internal Audit Plan. The Chief Internal Auditor answered by stating that this was based on risk assessment, and that some audits were completed more often as a result.  
• It was asked when the next Internal Audit Plan would be brought forward to the Committee. The Chief Internal Auditor clarified it would be presented in March 2024. 

Resolved: The Committee note the report.

The Chief Internal Auditor introduced the report, which informed members of the Audit and Accounts Committee of the work that had been carried out during 2022/23 in protecting the public purse.

The Committee queried how the findings compared to the rest of Hampshire. The Chief Internal Auditor stated this was difficult to compare due to differences between authorities.

Resolved: The Committee note the contents of the report.

The Legal Services Manager introduced the report, which presented the Committee with the draft Annual Governance Statement 2022/23 for approval.

The Committee discussed the report and made the following comments:

• The report lacked reference to councillor training.
• Raised concern that the Council Plan lacked measurable outcomes.

Resolved: The Committee approve the draft Annual Governance Statement 2022/23.

The Legal Services Manager introduced the report which presented the Committee with the Local Code of Corporate Governance 2023/24 for approval.

The Legal Services Manager agreed to include a table of compliance in future reports, and that a review of the format would take place ahead of the next annual report. 

Resolved: The Committee approve the Local Code of Corporate Governance 2023/24.

The Legal Services Manager introduced the report, which provided the Committee with information relating to a recent data breach.

The Legal Services Manager also informed the Committee of an update report which set out the response from the ICO alongside further recommendations.

Resolved: The Committee note the contents of the report.

The Legal Services Manager introduced the report, which provided members with an annual update on the use of RIPA, and other associated RIPA activities, and an opportunity to consider whether the RIPA policy and procedure on the use of covert surveillance under RIPA required further review.

The Committee were pleased that the Council only exercised these powers in exceptional circumstances and wanted this approach to continue.

Resolved: The Committee note the findings on the annual overview on authorisations under the Regulation of Investigatory Powers Act (RIPA) and other associated activities and agree the amended RIPA Policy at Appendix 1 of the report. 

The Legal Services Manager introduced the report, which provided members of the Committee with a summary of the viewing of individuals’ social networking sites in an investigatory capacity for the period 1st June 2022 to 14th July 2023.

Resolved: The Committee note the contents of the report.

The Head of Financial Services and Commercialisation introduced the report, which showed the activity within the Council’s treasury management function from 1 April 2022 to 31 March 2023.

The Committee discussed the report and made the following comments:

• Asked whether Chart 5, which showed the benchmarking for the Council’s externally managed fund investments, could be measured over five years rather than one year. The Head of Financial Services stated that the chart would be amended.
• Commented that the executive summary of the report was missing a summary of the Council’s capital losses. The Executive Director replied by stating that it would be added into the executive summary.
• A point was made that the Council’s external advice should not be limited to one company.

Resolved: The Committee note the report and request the comments of the Committee to be included for consideration by Council.

The Chair introduced Larisa Midoni from EY who introduced the report and presented the Committee with the draft audit results for the year ended 31 March 2022.

The Committee discussed the report and made the following comments:

·         The Chair insisted it was an essential part of good governance that members be able to ask certain questions of the Auditors without officers present. 

·         It was noted that both the Legal Services Manager and the Audit Partner (in absentia) confirmed that it was not appropriate for members to question the external auditor with regards to the statement of accounts without officers present.

·         The Executive Director of Corporate Services & Assets noted that the external auditors were happy to attend in advance of one of the programmed AAC meetings to meet with any members who wished to talk to them. The committee questioned what was this likely to be about, and this was confirmed to be if there is an area of concern regarding council governance, risk, controls etc.

·         Queried whether extended lease agreements would always be amortised across the life of each policy. The Executive Director advised that the Council had to consider each agreement on a case-by-case basis.

·         The audit fees charged by EY were questioned. The Audit Manager stated that the final fees were determined based on time spent on the audit, so were proportionate to the amount of effort required to complete the audit.

·         Asked how a gain on disposal of investment property by £4.6m was accounted. The Executive Director emphasised that it was shown as a one-off lump sum, to be amortised over the life of the asset.

·         An update was requested about two audit report recommendations in relation to internal controls as part of the audit for future lease payment disclosure, which would be brought at a future meeting this year.

·         An update was also requested on the progress of IFRS 16 preparations for a future meeting of the Committee this year. 

Resolved: The Committee note the report from the External Auditors, EY, on the draft results of the audit of accounts for the year ended 31 March 2022.

The Executive Director of Corporate Services and Assets introduced the report which provided the Committee with the annual statement of accounts for the year ended 31 March 2022.

The Committee discussed the report and made the following comments:

• Concerns were raised about a difference of accounting treatment between two transactions and the different accounting standards that had been applied. It was noted that this was now agreed between officers and external audit in relation to signing off the accounts for 2021/22.
• Councillor Basham stated that whilst the Committee approved the statement of accounts, he abstained.

Resolved: Authority is delegated to the Chair of the Audit and Accounts Committee, in consultation with the Executive Director of Corporate Services and Assets (Section 151 Officer) to approve the Statement of Accounts for the year ended 31 March 2022 and is authorised to subsequently sign the Statement of Responsibilities to that effect on behalf of the committee.

The Investment Portfolio Lead introduced the report, which outlined the activity within the Council’s Property Services team in implementing the approved Annual Property Plan 2022-23 during the year.

The Committee discussed the report and made the following comments:

• Asked whether investments in sustainable property would increase. The Executive Director advised that officers were discussing what opportunities there were to improve sustainability of the Council’s assets.
• The increase in the valuation of the Anvil was queried. The Head of Financial Services stated that the valuation method used for the operational asset was based on the cost related to replacing the building in its current state, and therefore this was impacted by the increased build and materials costs experienced in the last year. 
• Commented that Cabinet should address the community asset transfer to Whitchurch Parish Council alongside similar asset types that were being negotiated.

Resolved: The Committee note the contents of the report.

The Chair introduced the report, which provided an update on the Council’s externally managed pooled fund investments.

Due to the confidential nature of the information to be discussed, the committee passed a resolution that, by virtue of paragraphs 3 of Schedule 12A of the Local Government Act 1972, the public be excluded from the meeting.

Resolved: The Committee note the Pooled Funds Review.

The Chair introduced the work programme and gave a brief overview of the items that would be included on the agenda for the upcoming meetings.

The Executive Director advised that Arlingclose would provide a training session for the Committee which would be held before a future meeting. 

It was stated that the review on the Committees effectiveness would be brought to the September meeting.

The meeting ended at 8:34pm.

Chair