Hart Borough Council
Councillors:
33
Wards:
11
Committees:
14
Meetings (2025):
61
Meetings (2024):
60
Meeting
Audit Committee - Hart
Meeting Times
Scheduled Time
Start:
Tuesday, 28th March 2023
7:00 PM
Tuesday, 28th March 2023
7:00 PM
End:
Tuesday, 28th March 2023
11:00 PM
Tuesday, 28th March 2023
11:00 PM
Actual Time
Started:
Tuesday, 28th March 2023
7:00 PM
Tuesday, 28th March 2023
7:00 PM
Finished:
Tuesday, 28th March 2023
12:45 AM
Tuesday, 28th March 2023
12:45 AM
Meeting Status
Status:
Confirmed
Confirmed
Date:
28 Mar 2023
28 Mar 2023
Location:
Council Chamber
Council Chamber
Meeting Attendees
Committee Member
Portfolio Holder - Community Safety and Regulatory Services
Committee Member
Deputy Leader and Portfolio Holder - Finance
Officer
Executive Director, Corporate Services & S151 Officer
Graeme Clark
In attendance
Officer
Internal Auditor
David Harwood
In attendance
Officer
Chief Executive
Daryl Phillips
In attendance
Secretary
Committee and Member Services Officer
Jenny Murton
Democratic Services
In attendance
Secretary
Committee and Member Services Officer
Emma Evans
Democratic Services
In attendance
Public
Audit
Kevin Suter
Ernst & Young
In attendance
Public
Neil Pitman
Southern Internal Audit Partnership
In attendance
Agenda
1
MINUTES OF THE PREVIOUS MEETING
The Minutes of the meeting held on 25 October 2022 are attached to be confirmed and signed as a correct record.
Attachments:
- Document Minutes of Previous Meeting 20 Mar 2023
Minutes
The Chairman requested an amendment to the decision for Item 29, Appointment of Independent Person to Audit Committee.
The Committee discussed and all agreed in principle the following revised wording:
DECISION
Members at this time did not wish to consider the appointment of Independent Person(s) to the Audit Committee but agreed for it to be included in the updated Terms of Reference; this will allow an appointment to be made in the future if the Committee desires.
This amendment was proposed by the Chairman and seconded by Councillor Smith then agreed by the Committee.
With this change the minutes of 25th October 2022 were confirmed and signed as a correct record.
The Committee discussed and all agreed in principle the following revised wording:
DECISION
Members at this time did not wish to consider the appointment of Independent Person(s) to the Audit Committee but agreed for it to be included in the updated Terms of Reference; this will allow an appointment to be made in the future if the Committee desires.
This amendment was proposed by the Chairman and seconded by Councillor Smith then agreed by the Committee.
With this change the minutes of 25th October 2022 were confirmed and signed as a correct record.
2
APOLOGIES FOR ABSENCE
To receive any apologies for absence from Members*.
*Note: Members are asked to email Committee Services in advance of the meeting as soon as they become aware they will be absent.
*Note: Members are asked to email Committee Services in advance of the meeting as soon as they become aware they will be absent.
Minutes
No apologies received.
3
DECLARATIONS OF INTEREST
To declare disclosable pecuniary, and any other, interests*.
*Note: Members are asked to email Committee Services in advance of the meeting as soon as they become aware they may have an interest to declare.
*Note: Members are asked to email Committee Services in advance of the meeting as soon as they become aware they may have an interest to declare.
Minutes
No declarations made.
4
CHAIRMAN'S ANNOUNCEMENTS
Minutes
The Chairman and members commended the Interim Internal Audit Manager for all his work to date.
5
AUDIT COMMITTEE TERMS OF REFERENCE
The Audit Committee’s terms of reference should reflect best practice. Current best practice is contained in guidance issued by the Chartered Institute of Public Finance & Accountancy (CIPFA) in support of their 2022 Position Statement on Audit Committees.
New terms of reference are proposed that reflect best practice. They are attached at Appendix A. They are significantly different to the current terms of reference, providing more detail on the Committee’s role in overseeing corporate governance matters, risk management, financial management and reporting, external and internal audit and countering fraud.
The terms of reference also formally recognise the requirement that the Committee has to report annually to full Council on how it has complied with the 2022 Position Statement, discharged its responsibilities and assessed its performance.
RECOMMENDATION
The Committee is asked to:
i) consider the revised terms of reference at Appendix A
ii) recommend these to full Council at its meeting on 27 April 2023
New terms of reference are proposed that reflect best practice. They are attached at Appendix A. They are significantly different to the current terms of reference, providing more detail on the Committee’s role in overseeing corporate governance matters, risk management, financial management and reporting, external and internal audit and countering fraud.
The terms of reference also formally recognise the requirement that the Committee has to report annually to full Council on how it has complied with the 2022 Position Statement, discharged its responsibilities and assessed its performance.
RECOMMENDATION
The Committee is asked to:
i) consider the revised terms of reference at Appendix A
ii) recommend these to full Council at its meeting on 27 April 2023
Attachments:
- Document 23 03 28 Audit Committee Terms of Reference 20 Mar 2023
- Document 23 03 28 Audit Terms of Reference appendix A 20 Mar 2023
- Document 23 03 28 Audit Terms of Reference Appendix B 20 Mar 2023
Minutes
The Committee considered the revised Audit Committee Terms of Reference.
Member asked if the Committee would be preparing an end of year report on the work of the Audit Committee for this financial year. Officers confirmed it was best practice for a short high-level report to be produced. Members queried whether a new Committee could report on the work of the current Committee. Officers explained that due to the timing restrictions within the committee approval process the first annual report would be due April 2024.
The recommendation was proposed by Cllr Southern; seconded by Cllr Engström.
DECISION
The revised terms of reference were recommended to full Council at its meeting on 27 April 2023.
Member asked if the Committee would be preparing an end of year report on the work of the Audit Committee for this financial year. Officers confirmed it was best practice for a short high-level report to be produced. Members queried whether a new Committee could report on the work of the current Committee. Officers explained that due to the timing restrictions within the committee approval process the first annual report would be due April 2024.
The recommendation was proposed by Cllr Southern; seconded by Cllr Engström.
DECISION
The revised terms of reference were recommended to full Council at its meeting on 27 April 2023.
6
AUDIT RESULTS REPORT 2021/22
The purpose of this report is to provide the Council’s External Auditors with the opportunity to report the key findings of their audit to those charged with governance prior to issuing their opinion on the 2021/22 Statement Accounts.
RECOMMENDATION
That the Committee notes the Ernst Young LLP report.
RECOMMENDATION
That the Committee notes the Ernst Young LLP report.
Attachments:
- Document 22 HDC - Audit Results Report 21-22 20 Mar 2023
Minutes
Mr Suter, from Ernst & Young (EY) summarised the Audit Results 2021/22 highlighting key findings.
· No evidence of fraud or material weakness in controls
· Changes made to the accounts in relation to the valuation of land and buildings
· No disclosure issues in relation to pensions
· Significant improvements in the accounting for Covid-19 grants
He explained that although the report was substantially complete, some elements were outstanding due to reduced EY staffing resources.
Members questioned the amendment of land valuations, the practical implications of this and the challenges with resourcing the audit and if there was a statutory deadline for completion of the audit. Officers confirmed that the land valuations changes although important had no material impact on the income and expenditure position. Mr Suter explained that the resourcing issues within audit were a national issue. There is not a statutory deadline for the audit to be completed. Members thanked Ernst & Young (EY) for their efforts.
The recommendation was proposed by Cllr Southern; seconded by Cllr Davies.
DECISION
The Committee unanimously agreed to note the Ernst Young LLP report.
· No evidence of fraud or material weakness in controls
· Changes made to the accounts in relation to the valuation of land and buildings
· No disclosure issues in relation to pensions
· Significant improvements in the accounting for Covid-19 grants
He explained that although the report was substantially complete, some elements were outstanding due to reduced EY staffing resources.
Members questioned the amendment of land valuations, the practical implications of this and the challenges with resourcing the audit and if there was a statutory deadline for completion of the audit. Officers confirmed that the land valuations changes although important had no material impact on the income and expenditure position. Mr Suter explained that the resourcing issues within audit were a national issue. There is not a statutory deadline for the audit to be completed. Members thanked Ernst & Young (EY) for their efforts.
The recommendation was proposed by Cllr Southern; seconded by Cllr Davies.
DECISION
The Committee unanimously agreed to note the Ernst Young LLP report.
7
STATEMENT OF ACCOUNTS 2021/22
The purpose of this report is to seek the Committee’s approval of the Statement of Accounts 2021/22, amended following the external audit, the Letter of Representation and the Annual Governance Statement.
RECOMMENDATION
1.1 That Audit Committee approve the:
- Statement of Accounts 2021/2022
- Annual Governance Statement 2021/22
1.2 That delegated authority be given to the Executive Director - Corporate in consultation with the Chairman of Audit Committee, to approve any non-material changes to the 2021/22 Statement of Accounts that arise from the final external audit review work, and to approve the letter of representation
RECOMMENDATION
1.1 That Audit Committee approve the:
- Statement of Accounts 2021/2022
- Annual Governance Statement 2021/22
1.2 That delegated authority be given to the Executive Director - Corporate in consultation with the Chairman of Audit Committee, to approve any non-material changes to the 2021/22 Statement of Accounts that arise from the final external audit review work, and to approve the letter of representation
Attachments:
- Document 23 03 28 Audit - Statement of Accounts Report 20 Mar 2023
- Document 23 03 28 Audit Statement of Accounts 20 Mar 2023
- Document 23 03 28 Audit Annual Governance Statement 20 Mar 2023
Minutes
Executive Director - Corporate presented members with the Statement of Accounts 2021/22 and the Annual Governance Statement 2021/22. The Executive Director said that Mr Suter’s comment that an unqualified opinionwould be issued should give the committee confidence in the accounts, but he confirmed that any material changes would be returned to the Audit Committee.
The recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
Audit Committee approved the:
Statement of Accounts 2021/2022 and the Annual Governance Statement 2021/22
The recommendation was proposed by Cllr Southern; seconded by Cllr Smith.
DECISION
That delegated authority be given to the Executive Director - Corporate in
consultation with the Chairman of Audit Committee, to approve any non-material changes to the 2021/22 Statement of Accounts that arise from the final external audit review work, and to approve the letter of representation.
The recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
Audit Committee approved the:
Statement of Accounts 2021/2022 and the Annual Governance Statement 2021/22
The recommendation was proposed by Cllr Southern; seconded by Cllr Smith.
DECISION
That delegated authority be given to the Executive Director - Corporate in
consultation with the Chairman of Audit Committee, to approve any non-material changes to the 2021/22 Statement of Accounts that arise from the final external audit review work, and to approve the letter of representation.
8
INTERNAL AUDIT PLAN 2023-24
The purpose of this paper is to present the Internal Audit Plan for 2023-24 in accordance with the requirements of the Public Sector Internal Audit Standards (Appendix A).
RECOMMENDATION
To approve the Internal Audit Plan 2023-24
RECOMMENDATION
To approve the Internal Audit Plan 2023-24
Attachments:
- Document 23 03 28 Audit Internal Audit Plan Report 20 Mar 2023
- Document 23 03 28 Audit Internal Audit Plan 20 Mar 2023
Minutes
Mr Pitman from Southern Internal Audit Partnership, introduced the Internal Audit Plan 2023-24. This risk-based plan was devised in consultation with key stakeholders, it is a fluid document and will change as new and emerging risks are identified throughout the year.
The recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
The Committee approved the Internal Audit Plan for 2023/24.
The recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
The Committee approved the Internal Audit Plan for 2023/24.
9
INTERNAL AUDIT CHARTER 2023/24
The purpose of this paper is to present the Internal Audit Charter for 2023-24 in accordance with the requirements of the Public Sector Internal Audit Standards (Appendix A).
RECOMMENDATION
To approve the Internal Audit Charter 2023-24
RECOMMENDATION
To approve the Internal Audit Charter 2023-24
Attachments:
- Document 23 03 28 Audit Internal Audit Charter Covering Report 20 Mar 2023
- Document 23 03 28 Audit Internal Audit Charter 20 Mar 2023
Minutes
Mr Pitman summarised the Internal Audit Charter 2023/24. It sets out the purpose, authority and reporting requirements and is approved annually by the Senior Leadership team and Audit Committee.
A member questioned whether the report should be amended to reflect that the Audit Charter is in fact listed in the service plans. This was confirmed.
The recommendation was proposed by Cllr Southern; seconded by Cllr Engström.
DECISION
The Committee approved the Internal Charter 2023/24.
A member questioned whether the report should be amended to reflect that the Audit Charter is in fact listed in the service plans. This was confirmed.
The recommendation was proposed by Cllr Southern; seconded by Cllr Engström.
DECISION
The Committee approved the Internal Charter 2023/24.
10
RISK MANAGEMENT POLICY
1. This report details the outcome of the February 2023 review of the risk management policy.
2. Whilst the Cabinet are responsible for approving the policy, the Audit Committee have risk management governance responsibilities. Reviewing the risk management policy helps to fulfil those responsibilities.
RECOMMENDATION
It is recommended that the Committee review the report and consider what issues they wish the Cabinet to consider, if any, prior to their approval of the policy.
2. Whilst the Cabinet are responsible for approving the policy, the Audit Committee have risk management governance responsibilities. Reviewing the risk management policy helps to fulfil those responsibilities.
RECOMMENDATION
It is recommended that the Committee review the report and consider what issues they wish the Cabinet to consider, if any, prior to their approval of the policy.
Attachments:
- Document Risk Management Policy February 2023_Final.doc 20 Mar 2023
- Document Audit Committee RMP_covering report 20 Mar 2023
Minutes
The Committee reviewed the policy. The Interim Internal Audit Manager explained that whilst Cabinet has responsibility for the policy, the Audit Committee have risk management governance responsibilities and should have the opportunity to comment on the policy prior to Cabinet approval.
A member questioned the two points of authority and what happens if the Audit Committee is not content with any response from officers or from the Cabinet. The Interim Internal Audit Manager detailed how the risk responsibility lies with the Cabinet and the Audit Committee will have to accept their view ultimately.
The recommendation was proposed by Cllr Southern; seconded by Cllr Davies.
DECISION
The Committee raised no issues for Cabinet to consider prior to their approval of the policy.
A member questioned the two points of authority and what happens if the Audit Committee is not content with any response from officers or from the Cabinet. The Interim Internal Audit Manager detailed how the risk responsibility lies with the Cabinet and the Audit Committee will have to accept their view ultimately.
The recommendation was proposed by Cllr Southern; seconded by Cllr Davies.
DECISION
The Committee raised no issues for Cabinet to consider prior to their approval of the policy.
11
RISK MANAGEMENT UPDATE
This report updates the Committee on the effectiveness of the Council’s risk management framework.
RECOMMENDATION
That the Committee note the effectiveness of the risk management framework.
RECOMMENDATION
That the Committee note the effectiveness of the risk management framework.
Attachments:
- Document Audit Committee March 2023-RM effectiveness 20 Mar 2023
Minutes
The Interim Internal Audit Manager presented the Risk Management update stating there were no issues to highlight.
The recommendation was proposed by Cllr Southern, seconded by Cllr Engström.
DECISION
The Committee noted the effectiveness of the risk management framework.
The recommendation was proposed by Cllr Southern, seconded by Cllr Engström.
DECISION
The Committee noted the effectiveness of the risk management framework.
12
INTERNAL AUDIT ANNUAL REPORT AND OPINION
This report provides the Committee with a draft internal audit annual report and opinion for 2022/23.
RECOMMENDATION
That the Committee review and note the report.
RECOMMENDATION
That the Committee review and note the report.
Attachments:
- Document 2023-03-28 cover report-draft annual opinion 2022-23 20 Mar 2023
- Document 2023-03-28 draft annual report_opinion 2022-23 20 Mar 2023
Minutes
The Interim Internal Audit Manager highlighted the key findings from the draft Annual Internal Audit Annual Report 2022/23 adding that the plan had been delivered in full and thanking colleagues at Basingstoke and Deane and Wokingham Councils for their work. No significant issues need to be highlighted to the committee.
Hart District Council staff are responsible for managing IT controls and systems updates and formal procedures need to be produced.
A member requested an explanation of the recent error in Council Tax letters dispatched.
Executive Director - Corporate outlined the actions taken since the issue was identified and confirmed that the investigation is not yet complete. The Executive Director said he would report on the matter to the next meeting of the Audit Committee.
The report recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
The Committee noted the Internal Audit report and opinion.
Hart District Council staff are responsible for managing IT controls and systems updates and formal procedures need to be produced.
A member requested an explanation of the recent error in Council Tax letters dispatched.
Executive Director - Corporate outlined the actions taken since the issue was identified and confirmed that the investigation is not yet complete. The Executive Director said he would report on the matter to the next meeting of the Audit Committee.
The report recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
The Committee noted the Internal Audit report and opinion.
13
SHAPLEY HEATH GARDEN COMMUNITY PROJECT: CABINET AND STAFFING COMMITTEE FEEDBACK
The purpose of this report is not to rehearse the findings of the tiaa Shapley Heath Audit Review but to receive the following feedback reports:
a) The Officer response to the management recommendations contained within the tiaa report (attached as Appendix 1 to this report).
b) The response from Cabinet on lessons learnt; and
c) The Staffing Committee staffing review of the exercise of officer management oversight over the Shapley Heath Garden Community project for the period from March 2021 to the closure of the Shapley Heath Garden Community project (November 2021).
RECOMMENDATION
That Audit Committee recommends to Cabinet that it ensures the full implementation of all recommendations set out in this report and that Overview and Scrutiny Committee should in September 2023 review progress.
A. The Officer response to the management recommendations contained within the July 2022 tiaa Shapley Heath Audit Review report (attached as Appendix 1)
B. The response from Cabinet on lessons learnt; and
C. The Staffing Committee review of the exercise of officer management oversight over the Shapley Heath Garden Community project for the period from March 2021 to the closure of the Shapley Heath Garden Community project (November 2021).
a) The Officer response to the management recommendations contained within the tiaa report (attached as Appendix 1 to this report).
b) The response from Cabinet on lessons learnt; and
c) The Staffing Committee staffing review of the exercise of officer management oversight over the Shapley Heath Garden Community project for the period from March 2021 to the closure of the Shapley Heath Garden Community project (November 2021).
RECOMMENDATION
That Audit Committee recommends to Cabinet that it ensures the full implementation of all recommendations set out in this report and that Overview and Scrutiny Committee should in September 2023 review progress.
A. The Officer response to the management recommendations contained within the July 2022 tiaa Shapley Heath Audit Review report (attached as Appendix 1)
B. The response from Cabinet on lessons learnt; and
C. The Staffing Committee review of the exercise of officer management oversight over the Shapley Heath Garden Community project for the period from March 2021 to the closure of the Shapley Heath Garden Community project (November 2021).
Attachments:
- Document 23 03 28 Shapley Heath 20 Mar 2023
Minutes
The Chief Executive provided members with an overview of the recommendations. He acknowledged the findings were challenging for officers and members, areas that will continue to be addressed include:
· Tightened financial controls
· Adherence to the terms of reference
· Experience and qualifications of staff
· Strengthened internal project board
· Projects not overseen by own department head
· Greater involvement of portfolio holders
· Reporting mechanisms followed
· Officers to ensure members are more informed
· Members to challenge officers more and to a greater extent
· Amendment of Delegated Powers in the Constitution
· Amendment of whistleblowing policy
A query was raised regarding whether the Audit Committee had been given access to the Exempt report from the Staffing Committee. Officers confirmed that an investigation/disciplinary panel had ben established, chaired by Cllr Worlock. No formal report was issued by the Committee.
Members debated:
· Previous requests for financial information for this project by members
· Cabinet and specific Portfolio holders roles in this project
· Reports produced as part of the project and how they may be used in the future
· What effect the COVID-19 pandemic had on the governance of the project
Members asked how the Overview and Scrutiny Committee (O&S;) would undertake a progress review against the recommendations in September. Evidence would be provided to the O&S; Committee to show actions taken.
The recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
That Audit Committee recommends to Cabinet that it ensures the full implementation of all recommendations set out in this report and that Overview and Scrutiny Committee should in September 2023 review progress.
A. The Officer response to the management recommendations contained within the July 2022 tiaa Shapley Heath Audit Review report (attached as Appendix 1)
B. The response from Cabinet on lessons learnt; and
C. The Staffing Committee review of the exercise of officer management oversight over the Shapley Heath Garden Community project for the period from March 2021 to the closure of the Shapley Heath Garden Community project (November 2021).
· Tightened financial controls
· Adherence to the terms of reference
· Experience and qualifications of staff
· Strengthened internal project board
· Projects not overseen by own department head
· Greater involvement of portfolio holders
· Reporting mechanisms followed
· Officers to ensure members are more informed
· Members to challenge officers more and to a greater extent
· Amendment of Delegated Powers in the Constitution
· Amendment of whistleblowing policy
A query was raised regarding whether the Audit Committee had been given access to the Exempt report from the Staffing Committee. Officers confirmed that an investigation/disciplinary panel had ben established, chaired by Cllr Worlock. No formal report was issued by the Committee.
Members debated:
· Previous requests for financial information for this project by members
· Cabinet and specific Portfolio holders roles in this project
· Reports produced as part of the project and how they may be used in the future
· What effect the COVID-19 pandemic had on the governance of the project
Members asked how the Overview and Scrutiny Committee (O&S;) would undertake a progress review against the recommendations in September. Evidence would be provided to the O&S; Committee to show actions taken.
The recommendation was proposed by Cllr Southern; seconded by Cllr Hale.
DECISION
That Audit Committee recommends to Cabinet that it ensures the full implementation of all recommendations set out in this report and that Overview and Scrutiny Committee should in September 2023 review progress.
A. The Officer response to the management recommendations contained within the July 2022 tiaa Shapley Heath Audit Review report (attached as Appendix 1)
B. The response from Cabinet on lessons learnt; and
C. The Staffing Committee review of the exercise of officer management oversight over the Shapley Heath Garden Community project for the period from March 2021 to the closure of the Shapley Heath Garden Community project (November 2021).
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