Agenda and minutes

Audit - Wednesday, 20th September, 2023 7.30 pm

Venue: Conference Room 1 - 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 Councillor Douris and Elliot.


Councillor Guest substituted for Councillor Douris.



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 163 KB

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

Additional documents:


Cllr Birnie noted an error on page 12, paragraph 7, where 'councillors auditors' should read 'councils auditors'. TA advised she would amend the minutes.


The Chair ran through the action point responses and asked members if they had any questions.


Cllr Birnie raised an issue with the response regarding the percentage of tenants in arrears. A Livingstone clarified that the aged debt included all types of payment plan for commercial properties, with payments monthly instead of quarterly up-front being classed as a payment plan, with Cllr Birnie highlighting that the overall figure of 41% presented in the report was not helpful in identifying the seriousness of indebtedness without the more detailed breakdowns. N Howcutt suggested it could be broken down further in future if required. 


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.



Summary Internal Controls Assurance (SICA) report pdf icon PDF 481 KB

Additional documents:


P Lazenby explained that three audits had taken place to date, with Housing and Repairs and Maintenance, and ICT Document Management System both provided with reasonable assurance, and Commercial Rents, which was provided with substantial assurance, and that he had no overriding level of concern in any of those areas. He highlighted the priority two recommendation for Housing which had been disagreed by management, where the risks on the register had been identified as a little light, pointing out the new council directorate for Housing and Properties Services and the emphasis placed on the safety of housing, but acknowledging that the management response regarding the strategic risk was entirely valid. He suggested that it was something to remain aware of. P Lazenby noted that all actions for ICT following their audit had been completed in January 2023, and any annual actions would be re-checked in January 2024 and reported back if not completed. The Commercial Rent audit was taken as read, with P Lazenby praising the council for its handle on commercial rents and effective operation of controls. P Lazenby explained that progress in the annual plan was as expected due to the time of year, and that there would likely be a large number of reports presented at the next committee meeting. In regard to page 16, he highlighted that a small number of recommendations had been made that were ‘sticky’ but that he was hopeful progress would have been made towards completing and evaluating the related actions.


Cllr Guest referred to page 23, the ICT Document Management System, asking whether leaver accounts were disabled the day after leaving the council. N Howcutt noted that in the absence of a representative from the service, the question would need to be taken away for an answer, which would then be emailed to all committee members. Cllr Guest further asked whether cyber-attacks were on the risk register, and what mitigations there were. N Howcutt explained that cyber-attacks were a strategic risk that had been reported to the group in the previous month, with the next quarterly report expected in November. P Lazenby added that it was an audit that had been carried out in the past, and that he would expect to carry out again in the future.


Cllr Birnie referred to page 19, item 6, and wondered if the building safety audit included all housing stock. It was confirmed that it did.


Cllr Birnie referred to page 22, and asked whether the audit only looked at the council plan for maintenance, or also its implementation and outcomes. P Lazenby confirmed that implementation was looked at within the timeframe as contracted, including the regularity of reporting, timeliness of reviews, and escalation. It was noted that safety concerns formed part of the reason for the audit, so had been in consideration at all stages.


Cllr Birnie referred to page 34, in relation to Hemel Place, and the phrase 'action taken to date and any extant risk exposure', noting that the MOU (  ...  view the full minutes text for item 5.


Final Outturn 2022-23 pdf icon PDF 590 KB

Additional documents:


F Jump explained that the report consisted of the three reports relating to the last financial year and its closure, showing a summary of the financial performance of the council across revenue and capital for 2022-23. She said this was produced as part of the management accounts, providing more discretion over presentation compared to the statement of accounts, which had to be produced in line with accounting standards. She explained that the audit committee had delegated authority for any final movements to and from council reserves that were required to close accounts, and that was the purpose of the report being presented. F Jump highlighted recommendations relating to the general fund, with a request being made for the surplus to be moved to the council's reserves, and relating to housing revenue, with a small movement to reserves in relation to lift replacement. She also explained that a drawdown of £1.5 million had been requested relating to the HRA (Housing Revenue Account), based on increased demand and inflation, noting that a similar request had been made and approved earlier in the year, but that the end of year position was such that the additional request was being made. The rest of the report was taken as read.


Cllr Birnie referred to page 40, paragraph 1.2, bullet point 2, regarding the HRA reserve, and wondered how much would be left in the reserve after the second drawdown. F Jump confirmed that there would be around £150,000 left, from the original figure of around £2.5 million. In regard to bullet point 4 of the same table, Cllr Birnie asked how much had so far been spent on HGC capital projects. F Jump stated that at the end of 2022-23 around £117,000 had been spent, primarily relating to improvements to the Nickey Line.


Cllr Guest followed up with a question regarding measures that had been taken to prevent such drawdowns recurring. F Jump identified that forecasts for the current year were being made in close collaboration with the housing service to try and avoid it becoming a recurring issue, although demand and rising costs were still there, adding that the quarter one financial report had been taken to scrutiny and cabinet with pressure still expected, but work ongoing to bring the situation in line.


Cllr Reynolds asked how the reserve was replenished, and F Jump explained that it had been through surpluses on the housing revenue account in previous financial years, which seemed unlikely to occur in the current climate.


Following on from Cllr Reynolds question, Cllr Birnie wondered how the situation was going to be managed. F Jump noted that the housing revenue account maintained a working balance of around £2.9 million which was not touched except in emergency situations, and that reserves being referred to were separate to this. Cllr Birnie stated that it would be nice to have a list of actual reserves and expected calls on them, with F Jump highlighting that a list of all general fund revenue reserves  ...  view the full minutes text for item 6.


Statement of Accounts 2022/23 pdf icon PDF 508 KB

Additional documents:


P Cuttle took the report as read, noting that the length was due to the requirements of auditing standards, and highlighting on page 149 a reference to some items outstanding due to timing issues, with the majority of those now cleared, excepting some queries on the housing benefit expenditure. The letter of assurance from the county council auditor was identified as the most significant point, which would dictate whether the accounts could be signed, however P Cuttle stated that from his perspective the audit was complete, and the set of accounts up for approval was not expected to change. P Cuttle noted that there had been no recommendations raised in terms of control findings or weaknesses, and a single page of audit adjustments with only one disclosure item, which was indicative of a good standard of evidence and response to audit queries.


The Chair congratulated the finance team for all their hard work, and Cllr Symington added congratulations to Grant Thornton for completing the audit on time. N Howcutt also gave specific thanks to L Schultz and her team for their hard work.


Cllr Birnie referred to page 162 and queried whether there was not also a matter of value for money that also had not been dealt with. P Cuttle explained that value for money was decoupled from the audit opinion, so commentary would be provided on value for money arrangements, but to a deadline three months after the signing of the audit opinion. Cllr Birnie wondered if clarification on the item could be provided. N Howcutt suggested that the VFM audit was to provide the wider public with independent scrutiny on the expenditure of money, noting that for the 2021-22 accounts it had taken longer than usual and had only been finally approved a few months ago, with development of the audit likely going forward. P Cuttle confirmed that the scope was prescribed by the National Audit Office, and that it was relatively narrow, so was probably most useful around financial sustainability.


The Chair noted that Ernst and Young's evaluation of the Herts County Council pension fund arrangements was outstanding, which could have a bearing on the accounts. Cllr Birnie highlighted that in his experience with CAD (Community Action Dacorum) it had been at least ten years and Herts County Council was still to provide a similar letter regarding one person who had transferred. N Howcutt acknowledged that the Herts pension fund administration was not performing strongly, but noted that they were also aware of the issue and were in the process of making changes and setting up a feedback group to try and improve performance going forward. P Cuttle warned that, to his knowledge, all other Herts audits were on 2021-22, with substantial, if not full, completion of the 2022-23 audit required to enable them to issue the letter, adding that it could take weeks or months and that they wouldn't issue a provisional letter due to the related risks.


The committee agreed to approve the letter  ...  view the full minutes text for item 7.


External Audit Findings Report 2022-23 pdf icon PDF 478 KB

Additional documents:


This item was discussed alongside item 7.



Treasury Management Outturn and Performance Indicators 2022/23 pdf icon PDF 670 KB


F Jump explained that this item was one of three statutory reports to be brought before members in relation to treasury management activities, consisting of the treasury management strategy usually presented as part of the budget papers around February, a media update against the strategy, and the final performance report being presented. She further explained that treasury management activity covered the management of the council's cash balances, investment, and borrowing, and that the report was intended to measure performance against the strategy. Highlighted was a strong performance in investments due to large cash balances and significant increases in interest rates, with an average investment balance of £131 million, and an average rate of return of around 2%. F Jump also identified some early repayments to the Public Works Loan Board where it was advantageous to do so.


Cllr Birnie wondered what the advantage of early loan repayment was. F Jump clarified that there had been a discount resulting in a lower level of principle repaid, and interest payments over the remaining loan period had also been avoided.


The report was noted by the committee.



Work Programme pdf icon PDF 98 KB


The Chair asked if there were any questions on the work programme.


Cllr Guest questioned if the committee ever did a deep dive/risk focus report. F Jump confirmed that the quarterly strategic risk register was brought to the committee for this purpose. Cllr Guest wondered if there was any focus on specific risks identified by the committee. F Jump noted that it wasn't an approach taken to date, but could be done if the committee felt it was beneficial. The Chair agreed that it might be useful.


Cllr Birnie identified that there wasn't much on the forward plan. The Chair explained that it only went to the financial year end and would then start again.



Any Other Business (AOB)


The Chair raised a point regarding the way business cases were produced by the council and said he would like to have a meeting with the appropriate officer. N Howcutt noted that C Silva Donayre would be the person to speak to, and agreed to raise the matter with her.




N Howcutt to raise the Chair's question regarding business case production with C Silva Donayre.