Agenda and minutes

Audit - Wednesday, 26th July, 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 were noted from Philip Lazenby, TIAA.



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 167 KB

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


The minutes of the previous meeting were formally approved as an accurate record.


The Chair confirmed that all members had received the question sheet to submit questions in advance. Cllr Birnie advised that he had not received this and suggested that he preferred to ask questions during the meeting. The Chair stated that the sheet was just to provide members the opportunity to submit questions in advance and allows officers time to prepare, though questions can also be asked during the meeting. T Angel confirmed that she would check the circulation list.


It was confirmed that all actions were complete or would be addressed during the meeting.


ACTION: To check circulation list includes all members (T Angel).



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.



Strategic Risk Register Q4 2022-23 pdf icon PDF 484 KB

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F Jump presented the overview, noting that a strategic risk register is maintained for the authority and captures what the strategic leadership team considers to be the key risks facing the Council. The status of the risks is updated on a quarterly basis and the report is brought to the Committee for comment before being taken to Cabinet for approval.


F Jump advised that the Council has been through a process to update its strategic risks over the last 12 months with advice taken from TIAA and in consultation with senior officers. The result of this has been a series of revised risks as set out in the report, each of which are owned by a member of the senior leadership team. The individual officers update the status of the risk on a quarterly basis and the update is then brought to the Committee. F Jump noted that an explanation of the scoring system was appended to the report.


Cllr Birnie referred to page 14 of the report and the comment on the risk of not being able to deliver safe and good quality homes, which is marked as red. Cllr Birnie also commented on financial resilience, noting that it states that recommendations will come in July 2023 and asked where these recommendation are.


F Jump advised that the risk on providing safe and good quality homes is currently red as this is in reference to associated consequences of this risk, so if safe and good quality homes are not delivered then there is a potential risk to life and the health and safety of tenants.


Cllr Birnie referred to page 22 of the report, noting the comment that the HRA is being closely monitored as part of the mitigation strategy and suggested that this is not an effective strategy in maintaining safe and quality homes. Cllr Birnie suggested that, given the feedback he receives from residents, the main concern is Osborne and he was unsure why sacking Osborne is not listed as a possible mitigation.


F Jump commented on the monitoring of the HRA, explaining that this is in relation to the risk around weakening financial resilience and that the referral to close monitoring is around the financial position of the housing revenue.


Cllr Birnie asked F Jump to explain to the Committee the issue regarding the financial state of the HRA. F Jump advised that towards the end of the last financial year, there was an increase in expected repairs and maintenance costs in the HRA, which had a detrimental effect on the overall financial position of the HRA. F Jump noted that it was a large increase and reflected the increase in costs that are being seen as well as the increased programme of work as the Council looked to address issues across the housing revenue.


On the risk of failure to deliver safe and good quality homes, F Jump agreed that monitoring alone does not mitigate this and she noted the various actions taken by the  ...  view the full minutes text for item 5.


Summary Internal Controls Assurance (SICA) report and Audit Plan update pdf icon PDF 487 KB

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C Harris presented the report, noting the issued note on the failure to prevent fraud offences made in the 2023 publication and that these notes are available for members to see.


On the Empty Homes Report, C Harris noted the reasonable assurance weighting and advised the important recommendation and operational matter.


Cllr Douris referred to the key strategic findings and noted his concern about the grammar used. Cllr Douris asked if the document is up to date or should be up to date, stating that the note doesn't currently reflect the timeliness of the up-to-date-ness.


F Jump suggested that the procedure is expected to be up-to-date and reflect current practice.


Cllr Douris stated that the note should therefore read that the document should be kept up to date.


ACTION: Key strategic finding to be updated to read that document should be kept up to date.


Cllr Elliot commented that they recognise that Osborne have been dysfunctional, though they have improved and noted that they are now down to less than 0.5% of properties. Cllr Elliot advised that he has seen properties left in a poor state by tenants and that it can take several months to rectify this and that he felt the Empty Homes team do a good job in turning round properties. Cllr Elliot suggested that devoid properties are only a small percentage of the overall stock.


The Chair noted the recommendations in the report and asked why it has OEM (Operational - Effectiveness Matter) as a fourth category rather than just having three categories.


C Harris explained that OEMs are operational effectiveness matters and that they look to identify best practice items during the audit that may not warrant being an official recommendation but should still be raised for attention. C Harris advised that this is best practice to ensure that matters aren't lost in the report.


The Chair asked how many adopted general lease sheltered properties there are.


L Jugoo confirmed that the report should read 'adapted' and that this was a typing error in the report. It was advised that adapted properties can be general needs or sheltered accommodation. Last year there were only a few adapted properties re-let compared to the total number of voids. The adaptations could already be in place and the applicant is housed according to the adaptation need. There are a small percentage of properties that undergo major refurbishment where adaptation work is carried out in the property, such as installing a lift or wet room. It was advised that around 30 properties were identified as adapted need last year and that there is a waiting list for those with adapted needs and there is limited stock that can accommodate these adaptations.


The Chair queried what happened to the 93 properties that were not re-let.


L Jugoo explained that it is a constant rolling number for empty homes and void properties. L Jugoo advised that, as of today, there are 78 void properties in the system, which could be due  ...  view the full minutes text for item 6.


External Audit Annual Audit Plan 2022-23 pdf icon PDF 458 KB

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A Jha took the report as read, noting the significant risk areas as management override of controls, valuation of land and buildings and the net pension fund liability.


Cllr Birnie commented on the list of assets under the valuation of land and buildings and asked if this is the same asset audit they were told would take place this year to include land.


F Jump explained that this refers to the audit of the Council's published financial accounts and arrangements for producing these. Assets include all Council assets rather than a specific internal-facing review and is part of the overall external audit of the Council's financial accounts.


A Jha advised that some misstatements are above the headline materiality, which is currently £3.5m, and this accounts for 2% of the current year's gross operating costs for the year. The initial risk assessment for value for money audit has also been conducted and no significant weaknesses have been found in the planning at risk assessment stages.


A Jha referred to two new accounting standards, ISO 315 and ISO 240, noting that an assessment of internal controls of the IT infrastructure and systems is now required and that the assessment of the general ledger system will be conducted.


Cllr Birnie asked if the auditor's fees have increased.


A Jha advised that the fee has not increased significantly.


F Jump suggested that fees have increased by a reasonable amount over recent years to reflect the increased scope of the audit work being carried out and that the Council should expect an ongoing increase in fees.


Cllr Elliot asked if the £82,000 is the set fee for each year or is an estimate of the actual work that will be carried out.


A Jha stated that, at planning stage, they estimate the fee that they will be billing the Council for the year and that the £82,000 will be the fee for the year unless there is a change in scope or additional work is required.


Cllr Elliot commented that the fee may increase to £150,000 due to the issues with other councils.


F Jump explained that there is a scale fee set by the PSAA and as the work is carried out, external audit colleagues will feed back on additional work that is required and variations to the fee. The PSAA will then give a final verdict on the final fee and this will have to be paid. On the £150,000, F Jump explained that this is in reference to seeing an increase of around 150% in terms of the levels of fees to reflect the increased scope of audit work.


Cllr Birnie suggested that the strong performance of the Council in recent audits should mean that fees increase less slowly. F Jump advised that this strong performance does not mean there is a reduced workload for external audit colleagues.


A Jha advised that the Council will receive the scale fees in November 2023 and this will be made publicly available.


The Chair asked  ...  view the full minutes text for item 7.


Audit Committee Governance Update pdf icon PDF 497 KB

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F Jump presented the update, first noting the review of local authority audit arrangements, the Redmond Review. A key recommendation from the review was the appointment of independent persons on an audit committee and F Jump noted her proposals on how to address this. F Jump asked the Committee for its approval to proceed to appoint these independent persons based on the process outlined in the document.


F Jump referred to the Audit Committee Terms of Reference, noting that if the Committee agrees to the appointment of independent persons then it will be relevant to update the terms of reference to reflect the membership.


On independent persons, F Jump advised that appointing these is considered best practice and that they are likely to be required to appoint them in future so the recommendation is to start the process now.


Cllr Birnie commented on the recommendation for two independent persons and asked if the proposal is for just one.


F Jump clarified that the recommendation is for up to two persons and they would appoint up to two if they have suitable candidates.


Cllr Birnie asked if the independent persons would need to be paid.


F Jump confirmed that the position is not salaried and that the individuals could claim reasonable expenses for committee attendance.


Cllr Elliot felt it would be challenging to find people to act as an independent person on the Committee voluntarily. Cllr Birnie agreed with the comment.


F Jump asked C Harris what arrangements are in place at other local authorities. C Harris advised that some pay individuals a lump sum to attend whereas some sectors are entirely made up of independent persons, such as the police, and have good representations of people who want to be on the committee. C Harris suggested that they look to the market and potentially review the process if they are unable to attract relevant candidates.


Cllr Birnie commented on the person specification for independent persons and suggested that 'or the councillors' auditors' be added to items 4 and 5.


Cllr Douris noted a typo on the penultimate line on page 104. F Jump confirmed she would correct this.


Cllr Douris asked if they should look to recruit independent persons from outside of Dacorum to allow for a more impartial view. Cllr Birnie agreed with the comment and suggested that having someone local to Dacorum could be counterproductive.


F Jump advised that, when looking at other local authorities, they tend to look at individuals who know the local area but she also acknowledged the potential advantage of broadening the scope.


C Harris commented that they would also need to consider the travel required and suggested that they take any geographical boundaries out of the description.


The Chair suggested that they move being a Dacorum resident from essential to desirable, Cllr Birnie suggested that it be removed altogether.


ACTION: To update independent person’s description and remove requirement to be based in Dacorum (F Jump).


The Chair agreed that they first test the  ...  view the full minutes text for item 8.


Work Programme pdf icon PDF 100 KB


C Harris advised that the internal audit plan should read 2024-25, not 2023-24.


There were no further changes to the work programme.



Any Other Business (AOB)


Cllr Douris commented on the upcoming training, advising that he had attended the most recent Member Development Steering Group (MDSG) meeting and that Cllr Taylor seemed to indicate that he wanted a significant level of training, including the Audit Committee. Cllr Douris suggested that they should not duplicate training and asked that audit training not also be done at MDSG. The Chair confirmed that he would speak to Cllr Taylor about this.


F Jump commented that any future finance training for members will not be a duplication.


There being no further business, the Chair formally closed the meeting.


ACTION: To discuss audit or any other duplicated training with the Chair of Member Development (Cllr Stewart).



Pre Meeting Questions pdf icon PDF 421 KB

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