Agenda and minutes

Audit - Wednesday, 8th February, 2023 7.30 pm

Venue: Conference Room 2 - The Forum. View directions

Contact: Corporate and Democratic Support  01442 228209

No. Item


Apologies for absence

To receive any apologies for absence


Apologies for absence were received from Councillors Chapman, Symington and Elliot.



Declarations of Interest

To receive any declarations of interest


A member with a disclosable pecuniary interest or a personal interest in a matter who attends a meeting of the authority at which the matter is considered -


(i)            must disclose the interest at the start of the meeting or when the interest becomes apparent


and, if the interest is a disclosable pecuniary interest, or a personal interest which is also prejudicial


(ii)        may not participate in any discussion or vote on the matter (and must withdraw to the public seating area) unless they have been granted a dispensation.


A member who discloses at a meeting a disclosable pecuniary interest which is not registered in the Members’ Register of Interests, or is not the subject of a pending notification, must notify the Monitoring Officer of the interest within 28 days of the disclosure.


Disclosable pecuniary interests, personal and prejudicial interests are defined in Part 2 of the Code of Conduct For Members


[If a member is in any doubt as to whether they have an interest which should be declared they should seek the advice of the Monitoring Officer before the start of the meeting]



There were no declarations of interest.



Minutes and Actions pdf icon PDF 56 KB

To confirm the minutes of the previous meeting and consider the actions

Additional documents:


The minutes of the previous meeting were agreed by the members present and then signed by the Chairman.


There were no outstanding action points from the previous meeting.



Public Participation

An opportunity for members of the public to make statements and ask questions in accordance with the rules as to Public Participation



There was no public participation.



Statement of Internal Controls Assurance (SICA) Report pdf icon PDF 986 KB


P Lazenby presented the update, noting that 4 reports were being presented on council tax arrears, NNDR, Section 106 and Place Strategy. Substantial assurance have been given on the first three reports, and reasonable assurance has been given on Place Strategy.


The council tax arrears report has one routine recommendation regarding setting up a formal process for referral for an enforcement agency. Management have accepted this with a caveat around the necessity of doing this by exception over a 6-month period, which has been considered to be satisfactory.


NNDR has no significant recommendations and one operational recommendation, which is regarding best practice, and P Lazenby proposed not covering the report in any further detail.


The Section 106 report highlights a recommendation regarding the monitoring and maintaining of evidence and has been accepted by management.


The Place Strategy report has reasonable assurance with four recommendations classed as important and two as routine. The four important recommendations are largely in recognition of the importance of HGC (Hemel Garden Communities) and Hemel Place. The first recommendation suggests the memorandum of understanding be formalised, and management have provided a response indicating that it is a matter that is subject to partnership arrangements. A revised memorandum of understanding will be circulated for signing at a later date. The second recommendation looks at the risk register, and management have provided a response that is broadly in agreement with the response. P Lazenby referred to sections 3.1 and 4.1 of the policy regarding risk management, which highlight the importance of risk management arrangements, and management have provided a response indicating that they will update the risk register as well as an outline of how risk arrangements will be reported.


Looking at the next recommendation on Place Strategy regarding an adverse financial position, management have commented on this, disagreeing the overall level of adverse financial position and have noted the malleability of interdependencies. An update on this recommendation will be provided through the recommendation tracking process. The fourth recommendation notes key deliverables and the importance of having these as projects transition into active status. Management have provided an update and confirmed that KPIs (key performance indicators) will be updated as projects transition.


Councillor Townsend commented on Section 106 and asked what is being audited on the internal controls. P Lazenby advised that Section 106 is in relation to legal obligations regarding planning permission that the council has and the financial arrangements surrounding this. Section 106 was an area that was due to be audited though there has been little activity during the period with 4 ongoing projects.


Councillor Townsend asked which area Section 106 is focused on. P Lazenby stated that money had not been spent from the pots of money checked. Councillor Townsend queried if it was verified if there is a policy to spend this money. P Lazenby confirmed that the policy was checked.


The Chairman commented that Section 106 money is allocated specifically against projects and that it can take time before it is implemented  ...  view the full minutes text for item 5.


Internal Audit Programme 2023/24 pdf icon PDF 460 KB

Additional documents:


P Lazenby took the report as read, noting the plan for consideration and potential approval. The first audit is MTFS (medium term financial strategy), as discussed at the last Committee meeting, and that this is a core audit to be undertaken to underpin the strategic risk that the organisation faces. The Period 1 Health and Safety works were also noted.




The committee approved the annual audit plan for 2023/24.



Strategic Risk Register Update pdf icon PDF 613 KB

Additional documents:


N Howcutt presented the update, noting the recommendations to note the update, any further assurances, and to highlight the revised strategic risks put forward to the Committee and Cabinet.


N Howcutt advised of one change to the scores in reference to the Council's ability to provide sufficient quality and affordable homes, as linked to the moratorium. The moratorium has now been partially lifted, meaning that more development can be undertaken and there is now around £50m of new build programme in the HRA for next year. It was noted that the Council only provide a small amount of numbers and they are therefore reliant on the private sector.


Councillor Silwal queried the amber and red ratings. N Howcutt stated that part of the risk strategy outlines a matrix system for risks and anything that scores over 9 as an actual risk or over 4 as likely or consequence will be regarded as red, with amber being any item that scores over 2 or 3. The first red risk is on the failure to secure sufficient investment in essential infrastructure, which requires £1bn of investment, and is therefore particularly high risk as this relies on what funding is in place. The second red risk is regarding funding and income not being sufficient, particularly when there is an in-year pressure on budget. N Howcutt confirmed that there are several strategies in place to bring the budget back in line for the year.


N Howcutt noted the revised strategic risks, which commenced in June 2022 with a cross-party group of councillors to review the existing strategic risks. Key corporate priorities have been reviewed alongside the 52 objectives and key strategic risks have been identified around the delivery of the corporate plan. N Howcutt proposed a specific risk regarding climate and ecological emergency, which has cross-party support.


N Howcutt stated that, following the appointment of a new administration in May, there will likely be a new corporate plan and the strategic risks may need to be reviewed again, though the proposed risks remain a good basis for what the Council needs to focus on. Work has been benchmarked against other local authorities and it is therefore felt that the proposed list of strategic risks is appropriate for approval.


Councillor Townsend asked if the corporate plan had changed. N Howcutt explained that the corporate plan was revised in 2021 when the climate emergency was included in more detail. It was noted that Brexit negotiations have been removed.


Councillor Townsend noted the risk regarding infrastructure and asked how the scope of this risk is defined given that DBC is not responsible for all infrastructure. N Howcutt advised that the risk is now linked to the failure to deliver place, shaping and regeneration ambitions, meaning there is now more of a focus on what the Council does. N Howcutt referred to page 44 detailing the revised strategic risks as outlined in Table 1, stating that the risk has now been revised to ensure it is more appropriate.  ...  view the full minutes text for item 7.


Draft Treasury Management Strategy 2023/24 pdf icon PDF 649 KB

Report to follow.

Additional documents:


F Jump presented the update, noting that this was brought to the Committee as a supplementary item. The document has not been brought to the Audit Committee in the past, with Cabinet typically undertaking the scrutiny of this as part of the budget papers. F Jump stated that it was felt appropriate that the Audit Committee should review the strategy to provide comment and feedback for Cabinet to consider when making the recommendation to Council.


The strategy provides an outline on how the organisation manages cash flow, borrowing and investments, and the content of the strategy is dictated by legislation and CIPFA's Treasury Management Code of Practice. F Jump advised that prudential indicators must be included, a set of financial performance indicators to provide an overview of capital expenditure and borrowing requirements.


F Jump advised there is a new Treasury Management Code of Practice that will be effective from 1 April 2023, which includes increased reporting requirements. At present 3 documents are produced each year, the strategy, a mid-year update, and a report on performance produced at the end of the year. The new code requires quarterly reporting and this will be provided from 1 April 2023, which should be brought to both the Audit Committee and Cabinet. The new code also requires a liability benchmark indicator, which provides an overview of the Council's indebtedness, and a statement on ESG issues regarding treasury management also needs to be included. It was noted that skills and training for those who work on the strategy must be proportionate to treasury management activity.


Councillor Silwal commented on borrowing and asked if this amount could be justified. F Jump advised that borrowing for local authorities is part of the normal course of events with the majority of forecasted borrowing in relation to the housing revenue account and investment into housing stock. This work can be financed in a number of ways, including rental income and selling off existing assets, with borrowing being the final option.


The Chairman asked if a review of revaluing stock is required to ensure there is adequate range of equity. F Jump confirmed that stock is valued on an annual basis and that borrowing undertaken is independent of valuation. If it was felt there was significant market changes then more regular reviews would be taken.


N Howcutt noted the debt increasing to over £400m and advised that the Council has a housing stock of 10,000. On average, debt is around £30-35,000 per property and each property is worth more than this.


Councillor Townsend queried where the social statement is included in the report. F Jump noted that this is on page 35 of the supplementary item.


Councillor Townsend noted the change in investments with an increased focus on unspecified investments and asked for further clarification on this. F Jump explained that investments are categorised as specified or unspecified, with specified investments generally being those in sterling products that are UK-based and less than 12 months in duration, and unspecified covering  ...  view the full minutes text for item 8.


New Auditor Announcement

Verbal update.


N Howcutt provided a verbal update, noting that the Council was part of the Public Sector Audit Appointments Programme to appoint external auditors for 2023-24 onwards. It has been confirmed that KPMG will be the Council's external auditors for 2023-24 and they are now awaiting communication to plan the audit. KPMG are new to the local authority audit market, having left the market 4-5 years ago, though they are a well-known organisation and should therefore receive the same level of service previously received.



Work Programme


There were no changes to the work programme.