Agenda item

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 during the progress of the actual development. Section 106 is project specific and obligations are tied up in legal agreements. The Chairman suggested that Councillor Townsend may be confusing Section 106 with CIL, and Councillor Townsend retracted his comments.

Councillor Townsend stated that his concern is regarding the information being received on updates on Section 106 and is therefore not an audit concern.

It was clarified that Section 106 allocation is very specific and that it is checked that spending is in line with the legal agreement in place.

Councillor Townsend referred to the recommendation regarding the Place Strategy on page 11 of the report, noting the comment on the £170,000 deficit and the management comment suggesting that it is a £76,000 deficit. S Whelan noted that the budget has been in place for a draw down from reserves for around 18 months and is over a 2-year spend. The predicted overspend is up to September 2023 of £76,000. Given that work is likely to continue, it has been put forward into a restructure and further proposal regarding Place operation work. S Whelan advised that the financial forecast was confused in terms of budgeting between economic development and community partnerships due to Place, Communities and Enterprise being a new section of the Council. It has now been corrected as a £76,000 budgeted overspend.

Councillor Townsend queried where the £170,000 deficit had come from. N Howcutt explained that the audit had taken place in October 2022 when there was a pressure on the Place Strategy regarding the cost of delivery. When management responded, pressure was around £70,000, and there is now likely to be a balanced budget for the Place Project.

P Lazenby noted progress against the plan as detailed on page 14 of the report. A number of audits have been issued as final, two reports are in draft and will be provided at the next Audit Committee, and four additional audits have a brief issued and work is due to commence. P Lazenby stated that there are no concerns with regards to completing the plan by year-end.

Outcome

The Committee noted the report.