As the legacy and lessons of Pearl Harbor have passed to our children and our children's children, who will also stand the watch to continue to fight against tyranny and injustice. To America's World War II patriots here and watching at home, we will never forget your courage under considerable fire and seemingly insurmountable odds. Because of you, our future remains bright. We owe you an immeasurable debt, and we can't thank you enough for answering the call of duty when Lady Liberty did it the most. May God bless our soldier, sailors, airmen, Marines, and Coast Guardsmen, past and present, who stood the watch and answered that clarion call to duty. May God bless this beautiful state of Hawaii and may God bless the United States of America, which has always been and forever shall be the land of the free and the home of the brave. Thank you very much.


Siwyddoi'r gweithio, mae'r gwirioneddau ac i'r gwirioneddau cyfathio cwyrddol yn y cyfansfyrdd yn y ffrif. Fyngnodd yn gwirioneddau o'r byw yr Ymddangodd Cymru. Tym ni'n gweithio cyfansfyrdd yw Mike Lackins, ac mae'n cyfansfyrdd yn cyfansfyrdd. Felly bydd me'n gweithio cael ei gwybod yn y cyfansfyrdd, mae'n gweithio i gael y cwyrddol yn y cwyrddol yn y cyfansfyrdd. The camera follows the microphone being switched on, so councillors and officers are advised to wait a few seconds before speaking to allow the camera to catch up. If you are participating in the meeting via the live stream, please indicate that you wish to speak via the chat column and don't use it for any other purpose. Make sure your device is fully charged and that you switch your microphone off unless you are invited to do otherwise. Please ensure that you switched off all silence to any other devices so that they do not interrupt proceedings. Please use a headset when speaking and hold the microphone close to your mouth. When you are invited to address the meeting, please make sure your microphone is switched on. When you have finished addressing the meeting, please switch it off immediately. Speak slowly and clearly and please do not talk over or interrupt anyone. We have got quite a full agenda to get through today. I am going to suggest that we take the key amnesty project at the end of the meeting if there is time. Potentially that and the Six Monthly Strategic Risk Report may get deferred to the next meeting depending on how long we need to cover off the other items today, particularly given some exciting interventions from the National Government and Deluxe. On with the rest of the agenda as printed, item number one of the agenda is Apologies for Absence. Patrick, are there any apologies for absence today? Yes, Chair. We have had apologies from Councillor Helen Neyming. Thank you. Item number two is Declarations of Interest. Do any members have any interests to declare in relation to any item of business? If it becomes apparent later, please raise to that point. Councillor Sanford. Thank you, Chair. I have my usual declaration of interest as a non-executive director of Urban Street Housing. Thank you very much. Councillor Stobart. Yes. Thank you, Chair. I would just like to underline that I am a director of South Cambridge Investment Partnership and also South Cambridge Projects. Thank you, Councillor Stobart. And Councillor Williams. Thank you, Chair. The Greater Cambridge Partnership is referred to in three places. I am a member of the Assembly. Thank you, Councillor Williams. Thank you very much. Item number three is Minutes of the Previous Meeting. Are members happy to approve the minutes of the meeting that the committee held on 1 June as 2023 as a correct record? Does anybody have any corrections? No, if so, I move that we take those as a correct record of the meeting. Thank you, Secretary, by Councillor Sanford. Oh, sorry. Councillor Howe. Sorry, I just noticed, as the audience has been pointed out to me, that the County Council has mentioned several times throughout the report and therefore I am a County Council. Thank you. Thank you. Okay. Well, I'll take those minutes as approved then and I'll sign those after the meeting. Okay. Item four, our first substantive item, is an update on the external audit of the 2020-2021 financial statements. I believe we're joined by Mr Russell from Winston Young via the Teams chat. So, Mr Russell and Mr Olson, could you please present this report? Thank you. Thanks very much, Chair.  And you'll note in our introduction that we've talked about the timeline, which is an ambitious timeline that we've agreed with officers. We've been working for the last two months. It's been pretty pressured, I think, from both sides and we've made some significant progress. So, the report just sets out sort of area by area in the audit, those areas that are completed and those areas that are still underway and also gives you an indication of why that is and whether or not there are any findings to date. So, you'll see from your page 13 that it's a pretty clean position in terms of findings to date. And all the way through to page 15, you'll see that they're just one or two minor areas of information that we're still awaiting on the majority of those points to there. Then from page 16, you'll see that we've explained to you in a number of places just quite what's holding the audit up in terms of information that we're still requesting from the council or where they've struggled a little to get us the information in the right format for us to be able to undertake our work. And you'll also see that there are just a number of points where we're identifying some issues which need to be corrected in the accounts, for example, around the categorisation and classification of COVID grants, which were in 2021 a hot topic. So there will be when we report our final results report, a number of amendments that have been made to the accounts as a result of the audit process. But I think the main message is good progress, some significant improvements in the process and the quality of information that we're receiving from the council. But a few areas where it's still a little bit, there's a little bit more work to be done and there will be a number of adjustments coming through as a result of the work. Our intention is to continue on beyond the end of this month to try and finish out all of the areas that are listed in this report. And that should give us a good position then to be able to bring you a final results report at the next meeting. Thank you. Mr Russell, did you want to add anything before I turn to the room? No, I don't think so. Thank you. Mr Maddock, did you want to add any comments before I open this report up to the floor? Just to say that I think the teams have worked together really well. I think there's been good collaboration between the teams. I think I'd agree with Janet, it's been quite tough for both teams really because there's a lot of information flowing in a fairly short period of time. And given what's happened in past years, we've done it, it's happened over a much longer period. So I think it's been a pretty positive experience from our side as well and I hope so from EY's side. Thank you and thank you for those updates. It's one of the more positive reports we've received at this committee I think on this topic. So yes, I'll open this up to members for further comment. Councillor Heather Williams. Thank you chair and through yourself. Can we just check the adjustments that were referred to or take it their technical adjustments and not anything that would affect the cash faces of the council? It was referenced about format. Can I check that the external auditors have been clear with our officers as to what format that they want the information in? Missing information to check that all of that has been passed on and Mr Maddox is aware of it and how are we doing on the timeline for EY to finish and complete in their agreed slot? Thank you. Miss Thornton, can I turn to you first on some of those items? Yes, so at the moment the adjustments that we've identified don't affect the cash position of the organisation. If we're talking about the bottom line, I think it's too early for us to be able to give you that overall position because we haven't completed enough of the work to be able to determine whether or not there would be an impact on the CIS. But nothing that I'm aware of at this point in time that would affect that. In terms of format of information, absolutely where crystal clear is to the structure of the information that we require and that is all dealt with through our client assistance schedule in advance of the audit. So we set all of that out and then discuss what that looks like with the auditors, with the officers before we commence the work. So no difficulty there. And as far as I'm aware, the information is coming back to us. So as we put a request in the turnaround time to get that information back from Peter and the team has speeded up significantly. You probably want to refer to Peter to determine whether or not he feels he's on top of that and has the full list being worked on and turned around back to us. So in terms of the time slot, now clearly we had hoped to have finished the field work by the end of July, but as you can see from the report there are a number of areas where we haven't had the information quite yet in the format that we need. So we will extend our time over the next fortnight to be able to complete that work. So we have resources booked and allocated to this audit to get it finished rather than pulling out and coming back in. So I think what I would say was that when we set off on this process, we set the two month timeline, I think we probably realised it was really quite tight, really quite difficult. And I think it was flagged quite early on that there was a risk that the field work probably would potentially go into August. So it's really helpful that EY had taken out on board and been able to provide some resources just to finish off the last few items. We have regular meetings. So we have a meeting with Mark and his colleague. Things have been Tuesday to sort of check on progress. We also have internal meetings to see how things are going. And, you know, my colleague Fazzano Armed has been leading on this and, you know, she's been very much on the case, very much sort of assisting where she can and making sure that colleagues are applying towards it as quickly as they possibly can. I can't pretend there's not been one or two hiccups along the way, but generally I think it's gone really well. Thank you. Councillor Williams, would you like to come back in? Yes, thank you, Chair. Refreshing change, I think, was sort of along the lines of what you were saying earlier. It's very good to hear. It's good to hear Ms Dawson compliment our offices on the improvements and credit to the team for doing that. Thank you. If I can just come in here, just on these COVID grants in particular, I'd just like to understand kind of exactly where we are. So I guess my questions would be, is this the kind of audit work where you've reviewed a sample, you've identified some and now you need to go back and check them all, or have you already in fact checked them all? And then the other question would just be around the materiality of those which were incorrectly accounted for. I mean, either a sort of, either a pound figure or out of this much in COVID grants that the authority handled. We found this percentage were categorised as agency when they should have been this, or just give us a bit more of a flavour perhaps of what your audit work has uncovered here. So I'll answer that one, Chair. Thank you. So the COVID grant work and concluding that work is currently still in progress. So I think as our audit plan referred to the risk around the classification was due to the, how it's accounted for as a principle versus agent grant. The council provided an initial working paper when we started the audit that showed that determination from the council of how those grants were split. But what we found was the actual accounting that flowed from that classification assessment made by the council wasn't wholly correct. And there are some adjustments in the accounts in the draft accounts that don't follow the requirements of the sit for code of practice, even though the classification made by the council was reasonably correct in terms of how they'd split between principle and agent. So what we're doing at the moment is working with the council about what the impact on the accounts are and in terms of what adjustments are required to the accounts to make them reflect the requirements of the sit for code of practice. In terms of our testing, I think we're pretty much 90% of our way through the testing. So our testing is about how much income the council has received and how much expenditure they've then expended or passed on in terms of that grant, which then gives you your net position, which sits in your accounts. So we're almost there with the testing and that's quite a big amount of testing because the level of COVID grants received are in the tens of millions. So there's tens of millions of income and tens of millions of expenditure, but it really is down to the accounting treatment at the end of what has happened to that net balance. I think at the moment it looks like about £5 million is incorrectly accounted for, but as I say, we've not fully worked through those transactions, so I couldn't give a definitive answer on what the impacts are through the accounts. Thank you. I imagine we'll therefore get the full, the full blow by blow in the final audit report with the adjustments as in the usual manner. Good. I'll only further comments from members of the committee on this report. Councillor Williams. One thing in the style of the report, if I could just say, I appreciate we've got the sort of coding for the completed to not started, but naturally some of these categories will take more time than others. So what might actually be helpful is to have sort of percentage of the audit as a total because it could be, for example, we've got one or two pages, but actually they're really minor things compared to what's complete. So it would give public view that 80% or 20%, whatever it is, some sort of percentage, just to make it a little bit more open and transparent and accessible to the public, I think would be very helpful. Thank you. Councillor Williams, perhaps partners could take that away and have a think about how they can improve the transparency of, as you say, kind of progress to completion. That would be very helpful. Well, if there are no other comments, I'd like to thank Mr Ruslan, Mr Dawson and the rest of their teams, and indeed Mr Maddock and their teams. I know you've all been working incredibly hard over the last few weeks. And I think on behalf of the rest of the council, I think we can all say that we're very grateful. This is a key priority for the council, of course, to get this work done in an efficient and timely manner. And we know that takes a lot of hard work. So thank you all very much indeed. And I will let you return to that work as soon as possible. Thank you very much. So we were asked to note the progress and we have done so. So we'll move on to item five, the final accounts position statement and catch-up plan. So this is a report on the progress being made to bring the accounts in order up to date. Could I ask Mr Maddock to please present this report? Thank you. Thank you, Chair. So over the last sort of couple of months, we've been talking to the EY team about what sort of timetable we might put into place to try and get the accounts up to date. So you'll see at paragraph seven, a short table showing the timetable that we propose for the next few years' accounts. Broadly, it's looking at doing two cycles per annum until we catch up. One thing to note is that when we get to the 23-24 accounts, we will change auditors to KPMG. So at that point, we will obviously have different auditors. So there is a sort of a little bit of a sense of urgency in getting this up to date. So when the KPMG come in, they can take over as soon as they possibly can. So that's really all I wanted to say on that report, other than to say that things have moved on slightly since the report was published. We had a letter from the Department of Levelling Up Housing and Communities, specifically from the Minister for Local Government. And this is an issue that they have been looking at over a period of time. And they put in train some proposals to get authorities' accounts up to date. I think I'm referring the report to some figures around that only about 19% of accounts for 21-22 had been audited within the timescale. They've quoted that now as 27%. So there's obviously been significant challenges around the arrangements that have been placed in place in recent years. And obviously the audit firms have had difficulties attracting staff, retaining staff. So it's basically become a very challenging situation all round. So central government have taken this on board. And between now and the end of December, they're going to come forward with some proposals on how they might speed up the process, get accounts up to date. One of the comments they made was that it's important that when auditors are auditing, they audit up to date accounts. Because obviously that gives us more of an idea of what's happening in the future. I believe either Janet or Mark might like to comment on this point as well. Because obviously they've received the letter and they may or may not know a bit more than me, to be honest. So I'd like to hand over to our I. Thank you, Peter. Yes, Mr Russell, do you have any further comments on this intervention? Yes, so we also received the letter but have been working with the various stakeholders in the background. So the Department and the Financial Reporting Council in particular have taken this forward. Because as they say, and as Peter has referenced, there is a concern that due to the delayed number of delayed audits, the assurance for the taxpayer is not up to date and not focusing on the current information and the current issues that are taking place within local government. Because there's an awful lot of attention, time and capacity being spent on delayed audits, which actually doesn't give you that comfort and assurance about what's going on in your local council up to date. So they've made some quite radical proposals about putting in a backstop date by which, if accounts haven't been prepared and approved and audited, that the auditors would then be able to disclaim their opinion and move on. And also that the 22-23 scope of audit, which is set by the National Audit Office, so for 22-23 and for some future years may be reduced so that it focuses on information that is seen to be of more value to the taxpayers rather than spending significant proportions of our time looking at, for example, valuations of property, plant and equipment that the organisations are very unlikely to sell or change the use of or what have you. So there are some really quite dramatic proposals on the table that the purpose of reducing the scope of the audit would then be to allow time for SIPFA, who set your reporting framework, to really have a look at that and drastically overhaul that to make sure that it is slimmed down from the 150 to 200 pages worth of financial information that you have to produce each year that is really very complex and difficult to understand for your key stakeholders of your council taxpayers and members. So there are sort of two objectives, one to get the delayed audits all dealt with and two to streamline the process going forward so that this situation doesn't occur in future and the information and then the audit is focused, so the financial information reported and the audit are both focused on what is actually a value to the reader of the accounts. So that's the overriding purpose of this. But as Peter has said, there's a lot of work to be done by all of the stakeholders, certainly in the next six to eight weeks so that then the minister can produce a report in September and then by December to actually have enacted some change to the system. Thank you both very much, that's a really helpful update. I'm going to say this in two parts. So I'm going to suggest if we'll take any comments first of all on the proposed timetable as written and then if anybody has any questions about the latest interventions and changes then we can take those afterwards. So are there any comments on the proposed timetable that people want to make? Councillor Heather Williams. Thank you, Chair, just that I do note the reference about looking at a shorter period and being more realistic and I do think that's a sensible approach. Thank you. Okay, so are there any questions about the recent interventions? I might kick this off quickly. I looked and I couldn't see that any of these sort of drop dead dates had actually been published yet and how this might therefore affect this timetable. Do you have any further insight, Winston Young, as to what those might be or where we might know what those are perhaps? So various dates are being looked at by the DELUC team with FRC and what they're very keen to do is ensure that it provides the maximum assurance possible whilst dealing with the delayed audits and getting rid of what they term the backlog. So they are modelling. That's probably the best way to describe their modelling different dates. There's a proposal, for example, that audits of years up to 2021 may have a common backstop date potentially at the end of this year. So if they're not done by 31 December, they then may fall into that disclaim and move on position. But as you know, none of those dates have been published yet and I think we can expect to see something in the report from the minister in September. We too are hoping that they move quite quickly to issue those because it then allows us to consider how best to apply our resources to deal with the proposed changes and move quickly because clearly we have a significant number of audits to do and a very large team and we want to make sure that they're employed on the most appropriate work over the next 12 months as well. Thank you. That's helpful to get some sense of what's being discussed anyway even if it hasn't been agreed. Obviously, comparing that to our proposed timetable, we were, per our timetable, 21-22 of the audit would only be complete in March, so we would be a few months beyond the December date. I don't know if that has implications then as to when we need to prepare the 21-22 accounts and whether that's something we need to accelerate so that they, because currently they're due to be ready in November and I wonder if we need to bring that forward or if that's even feasible. Just to give us a bit more time this side of Christmas. Yes, we need to think quite carefully about how we're going to deal with this and conversations with Mark and his colleagues. The only other question I had is, I mean, thinking back through the audit plans that we have reviewed over the last kind of year is to your work. I'm not struck that there were huge, great tracts of it that seemed like a complete waste of time and therefore shouldn't be in the scope of future audits. So I'm not quite, I can't quite see at this point what a reduced or more focused audit would look like. I guess we have spent a lot of time talking about say the valuation of investment properties and things like that but those are quite material balances. So I don't know if you have a sense at this point, you know, for South Cam specifically, you know, in the past we've spent a lot of time looking at X and it's possible that for a year or two we might reduce that. I don't know if you have any sense of that at this point. So if I just start general first, chair, there's been a lot of pushback from local government in particular about the amount of effort that goes into valuations of property, not necessarily investment property but the other assets that you use, schools, different parcels of land, across the system there, a whole swath of different types of holdings that are valued on various different bases. For example, depreciated replacement cost or, you know, some sort of equivalent use valuation which takes time from the local government, you know, the council perspective to get valuations to then reassess to then put those transactions through and then for the auditors to get their specialists involved and have a look at that as well. And there's a lot of criticism about the fact that that can take a significant amount of time. Investment properties aside though because clearly those are ones where organisations are making decisions to invest to make some sort of return and that's an important measure that I think stakeholders are interested in. The other area that has been criticised is the amount of work that's required over the pension liability number given that the, you know, actuaries are involved in assessing that, rolling that forward. We then use our specialists to have a look at that. And the view is what value does that give to the reader of the accounts. Other areas that have perhaps under debate are financial instruments and the complexity of, you know, do people actually understand what that's telling them about the business of the organisation? Probably not a lot. So those are the areas that are in the sights of the minister and their team. And so for South Cams in particular, what it would do is just reduce the amount of audit effort focused on those areas, but clearly there's a balance to be struck. And that's what the working parties are doing at the moment over the summer to determine is that a safe reduction that we could implement and explain to the readers of the accounts so that they understand what assurance or not they have over those numbers that are presented. So those numbers would still be presented in the accounts at this point because SIPFA haven't yet changed the reporting requirements on those. Thank you. That's very helpful. And I have to be fair, you've reminded me of the pension issue, which does always seem, you know, it's something completely out of sight of the control of the council. And so to spend a lot of time thinking and worrying about it when it's essentially a number that's sort of given down from on high and gets put in the accounts. I think there's perhaps some scope there, as you suggest. The Williams, you wanted to come in. Thank you. Yes. Pensions, I think, is the obvious one that's really could do with, I mean, the fact that accountants are dealing with pensions in general, just sort of winds me up. Since that change, you know, it's completely really inaccurate really. But the other thing that I think would be very good for government to intervene on is when it comes to sort of professional debate. And I say this because sometimes a lot of time could be taken up over things that are very, what I would refer to as pedantic. Because quite often you've got something that could equally be argued that should be classified as one thing or another. It has no material effect. I think we have had a case of this before. And lots, lots of time and lots of things get taken up by something that's completely immaterial. So what I think some of the feedback that's been given and that I would hope to see in any reforms is that so long as it is defendable, so long as a council has a defence for its adjustments and its classification and it's not, you know, illogical like its revenue rather than capital or something that's completely out there, I'm going to use something really basic like a pen. Is it stationary? Is it, you know, is it things that are 12 months? Things that are and we get into these classification rows in the chart of accounts. I forget what it was, we had something last year that was very much a judgement-based system. So I think actually more emphasis on just a difference of opinion being okay but not having to impact and affect the accounts. I think that's very much what I'd like to see because sometimes I feel like we're literally arguing over if it's a millimetre that way or a millimetre that way sort of analogy. But that's definitely what I've fed back anyway, Jeff. Thank you. That's some helpful feedback and certainly these drop dead dates I think will certainly focus the minds as to what arguments are worth there, what discussions and debates are worth having and to what extent. I've got Councillor Harvey and then I'll come to you, Councillor Stibbart. Yes, Sam, thank you chair and through you. Apologies if I haven't been following this carefully enough and the question's already been answered but in the disdain and move on, I think that was a phrase you used Janet, that would there not be a danger that if something came to light that had been missed, say I'd say it's four years ago because we'd skipped over that one, would that not then potentially ripple through all the subsequent years that have then been signed off and could be in a situation where it had to sort of revisit sort of several years of signed off accounts? How would that work? Thank you. I think it was disclaim and move on. I think it was the expression. I mean, disdain works nearly as well. Yes. It's a good point how it affects kind of the opening balances moving forward and if we, you know, what's the risk of missing a kind of major issue? I don't know if anybody feels like they want to comment on that. I'm happy to give it a go. So you're absolutely right, Councillor Harvey, that that is a risk that you disclaim a set of accounts, which then means that you haven't got assurance over the opening balances. You know, a transaction could have taken place in that period, which then has a knock on impact into future years, but in each year you would then assess what you're looking at and whether or not that has an impact. So where has it come from and what would you need to do to correct it? Would you correct it in year or would you need to report it as an issue that had arisen from the disclaimed period? So the issue with disclaiming one period and moving on is that you don't have that assurance that you're bringing forward and therefore you may carry forward some of that disclaimer through one, two or even three years until it's worked through the set of accounts. But each year we would be looking at the transactions, the assets, the liabilities and their source. So we would be able to identify if there had been a problem in previous years because we would be reassessing it for the first time in effect to determine that it's being accounted for correctly. One of the proposals that the Minister is looking at is whether or not there's a deemed opening balance position. So if you have had a number of years that have been disclaimed, the auditors are instructed to deem those opening balances as assured and move forward from that position, which would knock out that potential implication of ongoing disclaimed balances over a number of years for an organisation. So it would get you to a clean opinion more quickly, which would be a good thing. The other element of the proposals is that we would not move away from the value for money assessment. So we would give an up-to-date value for money assessment, which would look back over the periods where there had been disclaimed financial statements and it would bring that all up to date. So if there was a concern about potentially level of debt that the organisation was getting into, and I'm using these as general examples, specific to South Cairns, but level of debt or potentially housing development and transactions, the way in which that was structured or being governed and that we had a concern about it, we would still be required to report that so that the local stakeholders were very clear on our view as to whether or not the arrangements were appropriate or not. So that also gives us that opportunity to go back and have a look at your significant transactions and decisions that are being made by the council and give a view as to whether they're being made appropriately or not. Thank you, that's very helpful. I mean, in some ways this may interact with the fact that we're obviously going to change audit for the 2324 accounts in any case. And whilst, obviously, auditors are used to placing some assurance on what the work of previous audits are, I would still naturally expect there to be a little more kind of review of the opening balances at that point because they're going to be responsible for providing assurance going forward. So it may be that we, I suppose we might build up a few disclaimers through 2122 and 2223, depending on how our timelines interact. And then we might try and achieve a kind of clean bill of health for 2324 once we're kind of a little more up to date. But I suppose, I mean, that would need the agreement of KPMG to spend perhaps a bit more time looking at opening balances than they might otherwise be expecting. So I guess these are just the sort of discussions that we're going to need to have over the coming months. Do you want to come in, Mr Medic? Yeah, so I mean, I think, based on what Janet said, I think I would agree with her on the areas that probably present less risk and there's a lot of time invested, I mean, for us councillors, I think valuations in particular. I mean, obviously, we lose properties via the right to buy, but generally the intention is to hold them for the long term. There's, I consider, a slightly arbitrary formula on arriving at an existing use value for those properties. And anything we can do to cut down on the work in relation to that, then I think I would probably support that. Thank you, Janet. That's an excellent point specifically for us. Councillor Stoepard, I think you indicated a while ago. Chair, thank you. So on the face of it, the proposals we've been talking about and Janet's been taking us through some of the implications look fair and reasonable. So transparency, prompt delivery of, you know, boarded opinions looks like a good thing, but I'm just wondering in the current kind of period of time there is a change of government in sight. Wondering, this seems to be the kind of thing that would, you know, carry through a change of government. But I wonder if there's some risk around the implementation that we could be thinking about and doing the core things, but perhaps leaving some things open so as to be efficient, you know, if there was a change of emphasis through a change of government. I think Janet nicely summarised some of the risks, but I'm wondering how the risk landscape changes with this new regime. And for example, we touched on some Treasury aspects, valuation of land and properties, whether there will be new risks introduced into the risk register as a result and whether that deserves some early thought. So just a couple of things, change of government and also the risk landscape. Thank you. Yes, I think it would be, I think maybe when we've got some more details we should perhaps include, it should perhaps be included in the strategic risk register that assurances might be, you know, more limited for a period of time. And therefore that will, you know, that has a knock-on impact, I guess, is to the risk of say, you know, a fraud not being detected. Although I would hope with the kind of narrowed scope that the, you know, the areas most susceptible to say fraud or this statement would still be kind of covered. But it's a good point, I think, that we should reflect that in our own thinking about risk and our strategic risk management. I don't know if anybody wants to comment on how this might change if, you know, obviously there will be a general election, as you say, in the not too distant future, which, you know, will lead to a change of personnel regardless of outcome normally. But I don't, I haven't picked up any sort of opposition dissent to any of this. I don't know if anybody wants to comment that other members of the current government or opposition or future governments might take a very different viewing. It seems a little unlikely, but I don't know if anybody wants to come in on that. No, I'm not saying. So I think you're right, Chair, that there's sort of two different levels. So there's a national political level. You know, Lee Rowley, the minister has determined that this really needs to be dealt with this situation and the fragility of the system. But actually everything else that needs to be put in train operates at the next level down. So typically within regulation and then within the code structures, both from SIPFA and from the National Audit Office and then from the FRC. So I think that once it's set in train, actually it drops down a level and those organisations, it becomes part of their business as usual and what they're primed to do. So it would be unlikely for it to sort of resurface at national political level again, would be my assumption at this point. It's not a first priority issue for political parties as I can see it. I hope that helps. Yeah, thank you. That's a really helpful clarification. Did you want to come back in on it? No, Chair. Excellent answers. Thank you. So Councillor Williams, thank you. I would just strongly advise that the committee sticks to what we're doing and moving the information at the time and not politicise anything. Surely whoever is in government will want the best for local government. I'm sure that would be the case and I apologise if I gave any impression to the country. If there are no more comments, I think we've gone through this report in some detail. So thank you, we've been asked to note the current position and the breaking updates and I think we have done so. So item six would be the key amnesty project but I'm going to move that to the end of the meeting just in case we have time and move straight on to the internal audit plan and opinion. So could I please ask Mr Tully to please present his report? Thank you. Thank you very much, Chair, and good morning to all of the committee. So we're on page 29 of the report pack and the purpose of this report is to communicate the next six months of work. We've got lined up also to provide feedback from the previous six months and really just report on the control environment and provide my opinion. We do of course now as you were provide regular quarterly reports to you all. So there will be a significant element of it which will be repetition from those. But it's a good opportunity to just take stock and reflect on some of the work we've done over the sort of past six months. I apologise it is a long report. We do like the committee to support our Charter and Code of Ethics so they are attached to us and appendices. It's good to review those on a regular basis and get your support. This year we've only made formatting changes but we'd definitely like to include these. It helps demonstrate our compliance with public sector internal audit standards and gets your support. So just to pick out some of the key points from the pack. Starting on sort of page 30 we explained our background so this is where we talk about our regular sort of more agile six month plan now. Where we look at work for the next six months but we come back to the committee on a quarterly basis. It's really important that we remain agile because the pace of change is great and significant. So I'll then go on to Appendix A, the planet itself and for some of you who've sat in the committee for a while you're probably quite familiar with this but it's just helpful to highlight some key points for those who are new to the committee. On page 35 section 3 this provides an overview of how we identify work to include in our plan. Some work will be mandatory and some of it will be risk based. Also on page 35 it's important that we reflect about our resources. It's important to recognise that the work that goes on in councils is very complex and diverse so we'll never be able to audit the whole council in a single year so it's worth making aware of that and so we prioritise the work we do according to risk and demand. On the following page on 36 we explain the assurance type of work that we do. Simply it is sort of core work that may be mandatory and it may be sort of dictated by central governments and good examples of that where we do grant certification work to provide assurance back to them or it could be risk based or it could be third party so that could be where we take assurance from where partners have done some audit work or that could be external organisations things such as peer reviews or ISO certifications. Moving on to page 37 we highlight our themes for the year based on the work that we've outlined and would like to do so it's good to just try and categorise and get a feel of flavour of the work. It's broadly the same as the previous year where I would say there's more of a focus on regulation and safety and that's because we're doing some work on housing compliance. It's a small paragraph but I always think it's important to stress that we do undertake follow up work if an audit review had a limited assurance rating or there are high levels of recommendations and we would probably follow that with a specific audit because it's important to make sure that those actions are implemented. Moving on to page 38 we look at our resources for the year and to split it according to different categories of work. I would say it's broadly the same. There still is a lot of demand for core work and grants being delivered which we've outlined in our forward plan. I would say perhaps one thing that has changed is governance risk and control work. That's increased perhaps compared to the previous year partly a reason for that cyclical. There's the National Fraud Initiative which we investigate potential cases of fraud and error and that's a sort of biennial exercise. A lot of matches can be there and we're in that part of the cycle so that's why that's increased. We're also anticipating work to support some projects in the Council and we've detailed that for you. From our sort of risk based plan we then move on to pages 39 and I suppose the real detail starts on page 40. This is our list of work which we are planning to do over the next six months. We split down between the risk based reviews first and then the core assurances come afterwards. Why we're always stressed as I said we've got a lot of audits we could look at. We have a further long list of things which could go on for the latter six months of 23-24 and then beyond that perhaps for another four years. We have a complete potential list of audits that's known as an audit universe. What we'll be looking from the committee is just to seek your opinion if you feel there's anything else that you would like assurance on. It's a good opportunity to mention that. As I say we do have this agile plan and ongoing quarterly reports to the committee so if you don't feel obliged to mention anything today there's lots of opportunities to have those discussions about future work. On page 43 we also detail activities which contribute to improving governance, risk and control environments. These may not be specific what we'd call assurance or audit but they are important pieces of work which add value and it's just absolutely correct that we reflect that in our plan so you get a flavour of what we do. Finally on the following page we talk about other resource provisions. Those are other examples where we add value to the council which would not be specific audits but will contribute to my audit opinion and forming the annual governance statement at the end of the year. So that's the sort of what we've got lined up for the next six months. Then we go on to Appendix B which is the progress, updates and opinion. So only just a couple of points that I would highlight there. On page 46 of your pack so that's section 2. Just to note that from resources point of view we've now currently got one vacancy in the team which we're going to recruit into that vacancy but we can make use of agency workers if needed in the interim period but just a big thanks to my team for helping deliver the plan during that period. It's very important just to make reference to the annual audit sort of opinion so that's included on page 47. Overall I have a reasonable level of assurance that controls are effective in the council that's the same level as the previous year. On page 49 rather than go through lots of detail we've listed the assurance work that we've done over the past six months going back to September and just to try and take a bit of paper we've hyperlinked back to the reports which you have the committee have already seen. So it's just a summary of some of the work that we've done there. I suppose more observations looking back at that some of the comments that I've made to the committee it's positive to see we've increased assurance across a number of reviews so overall it is looking quite positive. You'll see that it reflects a high proportion of grant work and the nature of grant work is it's quite transactional work so once the control is in place it is likely to be quite either sort of like poor assurance or full assurance that council by this occasion we do have a lot of full assurance ratings but hopefully you can take that as some confidence that they've worked well. And the other thing I think it's important to note we've completed some new reviews. I like to stress this because these can be more challenging for the team to complete because they're emerging areas and there's not a lot of historical guidance on how to tackle these but I think it is important that we rise to that challenge to provide sort of relevant and timely assurance to the council. On page 50 I just want to reflect the national fraud initiative work because that is quite a lot of transactions to look at so we've illustrated a chart in there which identifies the sort of volume of data that gets processed is quite a lot. Business grants it's worth reflecting that and I've included that on section 8 on page 51 although the business grants have long since been allocated to all people we have still been working on those over the past six months because that's part of the post assurance work so that's about us providing assurance back to central government then working with the National Audit Office. So that's been ongoing. I feel hopefully we're at the end of that now but it's definitely worth reflecting on that because it's a significant chunk of work. Then probably moving on from there I cannot provide a report without mentioning the public sector and internal audit standards it's important to reflect that it would maintain compliance with standards one thing I would just make the committee aware of is that global internal audit standards are being reviewed at the moment so we've consulted on that. The outcome of that work is inevitably going to feed through to our own UK public sector standards we expect that to probably come out late 24 so although it's not an immediate thing that we need to be aware of we're obviously watching it with keen interest to make sure that we need to change the way that we deliver our services we reflect those. And then just finally we have the three appendices the charter a very important document because it sets out our right of access and how we work within the council so it's very important to be able to support on that. Our code of ethics as internal auditors we have to make sure that we follow good standards that's the document that's changed presentation wise this year just tried to hopefully post some feedback make it a little bit shorter and easier to read because there's a little bit of duplication on that before. And then finally just a glossary of terms because we do use a lot of technical jargon in our profession so hopefully you can find that useful just to refer to it. So yeah that's the key points I want to bring out from the ports happy to take comments and questions. Thank you Mr Tully for a comprehensive overview as always councillor Heather Williams you wanted to comment. Thank you chair. I'm just wondering to what extent we normally have officers can advise me when we normally get the ombudsman report because the annual review letter has been published and I'm wondering given that we had 83% of complaints upheld compared to 59% of similar organisations what has been done to incorporate that in the future plan because from what I can see online it tends to be kind of planning and yet I don't see anything the six months that refers to planning could be wrong and that seems to be something missing. Also we are going obviously through a major trial at the moment there seems to be no incorporation of that I would expect to see internal audit looking at structures how robust that is things like checking our officers even though they're doing their working time are they able to do the right amount of training and CPD there seems to be a complete absence of that. Now can that be incorporated because as it currently stands I'm not happy. Thank you chair. Thank you. Mr Tully have you heard of this plan? Yes there's two things that I picked up from there planning we have done some planning audits over the past 24 months I suppose planning income is the next one on our long term list to look at but we also know they've also had their recent ISO accreditation so I'm keen to have a look at that and take some assurance from that but although it's not on the immediate six month plan it's on the longer term plan with regards to the four day week it's a fair question and what I say although we've not got a specific order in that obviously as part of the council we have sort of we're involved in what's going on and people have come to us when it's been reviews of changes to processes and things like that so we've been able to advise on sort of potential risks and hazards and so although there's not been a specific audit yes we are sort of somewhat involved in that but it's something that CPD feels strongly about it'll be something I'll be willing to take away and look into doing a more specific order of view but what I would stress is we've also got a lot of public scrutiny on this already and I'll be reluctant to sort of duplicate any work that other people are doing such as the Bennett Institute around performance management because that might not be the best use of resources but I'm happy to take comments from the committee on what you would be particularly interested in Thank you Miss Tully, we'd like to come back Council Williams With the greatest respect to the Bennett Institute I expect the internal audit of this council to be looking at council functions we can't just outsource scrutiny and audit internally so I would like to see that I couldn't quite gather whether consideration has been given to the results of the Ombudsman report because that's not great, we are outliers so has that been looked at and included and indeed will that be coming chair to us as it normally does I appreciate what have you done today which might not be on this one but has that been incorporated in the plan because it was not good to see us being out of kilter with the average Thank you Council Williams I must confess so I'm not familiar with the route which the Ombudsman report would flow presumably it ends up with Cabinet and potentially council at some point in a position to advise on the has it come to us in the past? I think it has come here in the past I haven't seen this year's letter but you say it's been as far as you're aware it's been issued Yeah, a copy of it Certainly in the past it has come here more information I'm happy to bring that to a future committee meeting Sorry, Mr Tully, you wanted to come back in Yeah, so I'll just add that when we compile the annual governance statement that is a document which will feature external sources of assurance that will be one of those so we'll make reference to it in that document as well Thank you Perhaps when we consider the Ombudsman report we might perhaps Mr Tully you could be present when the committee discuss that and if we feel there's something coming out of that that needs to be on the internal audit plan perhaps we can discuss it then Is that a sensible way forward council Williams? Chair, as it currently stands because to me that's something that's a document that should be used in putting the six month plan together looking at that doesn't feel like that sort of happened also it doesn't feel like the current activities of the council are included with the trial so currently I'm happy to support 5.2 in the recommendations of approving to support the Charter and Code of Ethics I completely agree that should be endorsed by the committee but I am not happy to vote or support for the audit plan and strategy I would suggest that that's deferred to the next meeting for all the things that we've addressed to be incorporated and then we can see it and see what that would actually look like Chair Thank you council Williams I'll consider your request in the meantime are there any further comments that members of the committee would like to make council howl? Thank you chairman Chairman just following on really from what council Williams has just said it does seem to make sense to everybody that we don't plan until we know what needs to be done and obviously this particular audit letter or Ombudsman letter I should say rather is a vital part of that forming that new plan and therefore I will vote against it but I would rather vote that we defer that particular part and put it together with using that as a future guidance for them to come in here Thank you councillor howl councillor's debate Thank you chair so I had two more general comments or questions comments, questions one about data analytics and there is mentioned from time to time the participation in the in the government scheme I don't quite understand I don't think this is the place for a detailed explanation as to how we work with the government scheme but I guess we're using baseline data against which or into which we're inserting some of our own but I just wanted to ask about the future direction of data analytics because it is very good value you're collecting data and if we're just referring to fraud for a moment, the possibility to detect fraud using data streams and appropriately formulated detection methods has huge potential so I think it would be nice to feel that some reassurance that this investigation of data analytics is the first step towards something broader in scope and deeper in capability so that's a very general thing but perhaps I could invite response on that question and I've got a second one but could we do the data analytics first? Certainly, Mr Tony do you want to comment on the data analytics? Obviously, I can just say that I'd also like to come back on some of the comments that were just made previously as well Yes, I'm sort of minded that we might take a shorter judgment just to conserve how we want to tackle that so let's come back to that in a minute and maybe let's do it, thank you So yes, data analytics very very important there's lots of different ways we can do it and of course AI is becoming quite an interesting tool as well now so we have been doing it in some respects for many years as part of the National Fraud Initiative in terms of data matching and a lot of that has risk based approaches to the data and what I encourage the team to do is whenever they commence an audit review they grab as much data as they can to do a deep dive because that'll inform where best to focus their resources when it comes to testing So we're trying to stay ahead of the game as much as we can as part of our sort of science compliance we have regular quarterly workshops as a team where we get together and look at different ways of working and new practices to adopt and data analytics is one which features regularly in those training sessions so we also develop lots of approaches and tools and share it with each other Through you chair Is there any more we could do to encourage the take up of data methods of taking best practice from elsewhere or maybe that's using software solutions established techniques that have been proven in other applications and so on just a general question as to how we can resource this process but more efficiently perhaps So yeah we do as part of our training we have peer network groups and so we do link in with some other public sector organisations and we've seen some really fascinating interesting things which have been done by the national audit office I have to be truthful and so obviously their budget to do a lot of these things is a lot greater than ours but there's certainly some tips and tricks which we pick up from them and we try and adopt wherever we can we keep an eye on what we can do Thank you Would the committee be happy with a 5 minute adjournment I'd just like to discuss this issue around whether the stuff we want to take out of the Ombudsman's report and I just think we're going to achieve that more quickly if we're not very carefully taking turns and bouncing it back and forth so the committee happy with a 5 minute adjournment to discuss that Thank you very much everyone Thank you very much and apologies for that adjournment but it enabled a fruitful discussion which I will now update you on Before I do that I want to make one final comment on this I think I'm a little concerned at the suggestion perhaps that internal audit is being bombarded from all directions with requests from work whether that's central government, whether that's this committee whether that's proactively identifying risks and that there's some concerns around the overall scope of what you're able to cover within a particular 6th month or 12 month period that's why we'd like perhaps to suggest to the head of internal audit and the Chief Operating Officer that they consider whether the team is adequately resourced as it stands and whether a business case needs to be prepared for additional resource into this team in light of the many challenges that are being thrown their way so I'll leave that with that suggestion In terms of the other comments that the committee have made I'm going to add a recommendation which will read as follows the committee will recommend that the head of internal audit in consultation with the chair of the committee will adapt the audit plan to incorporate risks identified by the ombudsman complaints Councillor Heather Williams Thank you chair and I appreciate inclusion of that Obviously that was one of two things that we were concerned about the other thing in relation to the 4 day week and training has not been incorporated so can I move that we take I and Roman numeral 1 and Roman numeral 2 separately I'm happy to support Roman numeral 2 but I will vote against Roman numeral 1 on the basis that nothing to do with the 4 day week has been included at this time Thank you chair I have heard your concerns particularly around training and CPD as part of the 4 day week and I will consider with other parts of the council if there's something we can add to the head of internal audit plan as an appropriate moment in the trial but I appreciate your disappointment that it's not present today Are there any further comments or concerns as part of this item Well thank you all for your comments and your frank views I'm just going to find the exact recommendations if you can bear with me for one moment Thank you very much So the Audit and Corporate Governments Committee requested to consider this report and the appendices so there are three recommendations now I as written approved the draft audit plan strategy Roman numeral 2 approved the supporting charter on the code of ethics and Roman numeral 3 which is the new addition which is that the head of internal audit in consultation with the chair of the committee will adapt the audit plan to incorporate risks identified by the Ombudsman for Complaints Can I have a seconder sorry for the inclusion of that proposal Thank you Councillor Samford Seconded So I'm going to take each of these in turn Are we all fairly clear with what's going on Yes, I'm seeing some nods Good, right, so recommendation 1 there will be votes on these, recommendation 1 is to approve the draft audit plan and strategy Can I see all those in favour of approving the draft audit plan Can I see those against Thank you Can I have the results of that vote please Thank you so that is carried recommendation 2 approve the supporting charter and code of ethics Can I see those in favour please Thank you and recommendation 3 the head of internal audit in consultation with the chair of the committee to adapt the audit plan to incorporate risks identified by the Ombudsman for Complaints Can I see all those in favour of that recommendation please Thank you very much That concludes that item We move on to item 8 which is an update on the topical corporate governance methods Mr Tulley, if you could please present this report bearing in mind I think we've probably covered a lot of this ground already so happy to keep this fairly brief Thank you Thank you chair Committee, we are on page 71 of your PACS now This is our regular quarterly update There isn't a lot to report this course in terms of content because it's been picked up in other reports on the agenda so we can go because quite quickly On page 72 I want to report two reviews which were completed in the last quarter Taxi licensing and also asset management loan records the asset management loan records was requested specifically by this committee last year That has got a full level of assurance It was a challenging audit today because it's a little bit of a case of known unknowns so we have to do a little bit of a text to work around that but there was very much a positive outcome from that work that we had assurance that we had a good knowledge of all the assets the information was robust and also the valuation was recent and updated accordingly The other one is taxi licensing This was a very topical audit review demonstrating our agile plan in response to recent legislation which came out so we wanted to make sure that licensing team were sort of complying with that latest legislation and we can provide reason assurance that they are doing that They had actually been demoing a similar system for a couple of years so they were well skilled and versed We did identify a couple of small level recommendations and it was credit to the team that they worked with us and implemented them pretty much immediately so we will probably be able to say that once that final one is done we are at a full level of assurance but it's very pleasing to see that they have done that and we are well prepared On page 74 we have the regular counter fraud updates the usual sort of statistics there that follow I don't have anything to report on that myself so I'll take it straight to the final page 78 which is training, development and risk insights just two toppling updates for the committee to be aware of the first one being latest updates on the audit accounts I don't propose to talk about that because that was covered earlier on in the agenda with some more information with the letter from Minister Rowley but the second point there just to be aware of there is a new sort of proposed legislation coming in from the Home Office about preventing fraud in the organisation this is not just councils, this is all business At this stage we are expecting further clarification information on what that means but I thought it was helpful to raise your awareness of it at this early stage I think on the whole it's probably a positive thing but once the sort of further information is published we can then just make sure that we are treating that accordingly and so we need to make any changes to our internal processes difficult to say but I kind of anticipate we'll probably function like the bribery act it's probably about us undertaking a risk assessment and demonstrating we have reasonable controls in place to prevent it happening because of course you cannot always prevent things going wrong it's about demonstrating you've got proportionate controls in place so just to make you aware of that and that's everything in that report, thank you Thank you Mr Tully I was very pleased to see the asset management and land records coming back, I know that's a piece of work that this committee took particular interest in so thank you for completing that piece of work and a really positive outcome Just on the taxi licensing I'm aware this is obviously a kind of a very live issue so you've identified these two medium actions that needed to be undertaken did you say that you have assurance that they've already been that they've already because a medium doesn't necessarily happen immediately so I just wanted to clarify the assurance that those have actually happened Thank you, yes one has been implemented I expect probably the other one has but I've been away for the last two weeks so I cannot actually confirm that but it was relatively quick change so it probably hasn't, if it hasn't I'd expect it to be done very soon Thank you, I think maybe if you could check in when you have a spare moment and just ensure that that's taken place Are there any comments on this quarterly update? Captain Samford Thank you chair Mr Tully, the number of live investigations 63 seems quite high is there a block that's preventing these being concluded or have you got any further information? I think Captain Samford it may be Mr Matic for this Yes, so we have seen an increase in referrals and I think that's partly due to the key amnesty so we have got another increase in live cases ongoing The team are working through the investigators are working through those I think since this report was compiled we've had what we call our sanctions panel to look at some of the cases and some have been put forward for prosecution so we have seen an increase in cases and I'm not overly surprised and it's interesting to know that the highest number of referrals were actually in relation to housing fraud which is where the key amnesty was aimed at Thank you for that update I'm going to give you a stereotype for messing things up by moving the key amnesty to the end but councillor Heather Williams Thank you chair and I'm sure we'll let you off the key amnesty issues we've already read the documents so what I was going to say is that actually a cane number of cases 63 but I think that's a positive thing in that people are reporting I would actually be very very nervous if we were only seeing one or two what actually the programme isn't working because the reality is unfortunately and in the current economic climate there will be an increase of this sort of issue I think anything that helps to stamp out fraud I'm using my words very carefully it's not all about prosecution prosecutions are needed and they're needed to set an example but for me there is more than just a financial reason to go after fraud there is a moral reason this is tax payers money we do not have money this council has no money of its own it belongs to the taxpayer and I think there is a moral obligation and to to prosecute, prosecute not prosecute I'm trying so carefully my words here to prosecute to not because of the the individuals that are doing it but to make the point that we will not tolerate defrauding the taxpayer I'd also say that I know there are always going to be pressures and budget pressures but I think this area deserves the resources that it needs because we will never be able to calculate how much has been stopped as deterrent so I really would stress that 63 actually for me I'm pleased to see that and I'd also encourage, I know we've had it before but a reminder to members as well as councillors we often will come across or see things or hear things that more than the most and I think that it's a duty on all of us to if we are nervous or think of something is wrong then we should be reporting it thank you chair thank you councillor Williams of course we've got the training legs today where we can look at some of these issues and talk these things through very much look forward to that thank you Mr Maddick are there any further comments on this report excellent so we have been asked to note this report which we have done so so we move on to item 9 which is independent members this is for the committee to consider whether we should include an independent member on the committee could I ask Mr Tully to please present this report in the first instance thank you thank you chair we are now on page 79 of our agenda facts it really is as simple as the chair introduced it's for the committee to decide whether we want to appoint an independent member to help make that sort of decision and we've outlined some of the information in the report so starting on page 82 where we get to appendix A we've highlighted some of the benefits of independent members that is based on professional practice and guidance which is out there now we also include on page 82 historical evaluation because I think it's positive to reflect that the committee has considered this before in the past at the time we didn't think it was appropriate to continually reviewing this going forward but most recently in March of this year when we actually reviewed the committee when I was taking a self-assessment to the latest professional guidance from SIPFA we thought it's appropriate to actually now review whether that would be a good time to appoint an independent person some of the professional guidance and best practice is laid out on the following page on 83 I mean there's three things there which I've highlighted there's the Sir Tony Redmond review which was published back in 2019 then there was a SIPFA position statement which came out and they highlighted it would be best practice to actually include potentially two members and then finally there was the SIPFA guidance which we used most recently to evaluate our own committee on the following page 84 we highlight the process and potential challenges so if we do approve this as a committee we all need to make constitutional changes and it is worth recognising that there will be potential challenges even if we agree to go forth and do this of course there's no guarantee we find a suitable candidates but let's hope we can we've also included on page 85 and this is relatively similar to what the committee was in a couple of years ago is a role description for the independent person as well as that it also highlights skills and competencies that we'd expect them to have so I think just hopefully that summarises it and have to take comments or questions I think between myself, Peter and John Murphy's online we can probably hopefully pick up most those questions Thank you, I'd like to open this report to comment I've got a pretty open mind about this at the moment so councillor how? Well, to be perfectly sure, I'm not concerned happy with this because I'm not because in the end we are the ones who are elected and we are the ones who are and I think it would be fair to say this committee tries to be as non-political as possible because none of us want us to be caught out in anything so I'm not happy with this however upon saying that it looks like this is going to be brought in anyway when Parliament time allows as it says so we may as well bite the bullet and go for it I don't think they should have voting rights because they don't have been elected but I think it all encapsulates to me on page 84 in paragraph 39 and that's going to be the issue we need somebody who's going to be able to sit here and from day one to be able to know what they're doing with regards to local government finance and also what the committee works without increasing extra work but it's not needed so it's a tall order and the person should not have any critical background so ideally not a member of any particular party I think we've got to bite the bullet and go for it but it's not something I'm going to be a cheerleader for Thank you councillor, for those reflections councillor who it is I'd echo that I'm not a fan of people that haven't been elected sitting at council meetings in that capacity we have officers to support us and to advise us I think we'd be sure that there wouldn't be voting rights definitely and obviously non-political and I'm sort of looking through the benefits and seeing what benefits we would actually get from it because it says about political cycles I appreciate actually if you're a council that's going out in thirds you've got a lot of turnover there are some councils that change control on anual basis but for us we are all outs there might be the odd by-election but it's pretty consistent so I don't think it would help I don't think it's overly going to be beneficial or needed but as councillor Howell says better to do it now probably and have a bit more control over the situation the skills of this person as we said is a tall order and I think recruitment is going to be difficult given that the allowance not many people are going to want to sit here for £1,100 you look at our allowances we must be mad to do what we're doing so I think it will be different called my concern at the moment is with the recruitment what happens if we can't get the right person because my worst case scenario is we put somebody in because we feel we have to get the right person and do we have to feel or can we have a provision that means if we haven't got the right person we can go without I'd much rather have nobody than the wrong person and that's my real fear and also how would this person be be selected what is the recourse if we find it's not working there's lots of details there's some background to this the practical nature of my personality type chair is thinking we need get out clauses for if this doesn't work because it's only a small amount but it's still taxpayer money we want it well used I feel as council house said pushed into this rather than really particularly wanting it thank you council Williams I'll come back to officers for any comments in a moment if that's right these are very helpful so thank you both Do any other members of the committee want to come in councillor Sanford and I'll come to your councillor Staglard thank you chair the paper refers to independent members I think more than one independent member would make it too top heavy in terms of this committee so I think if we do go down this route it should be just one independent member thank you thank you this committee is a very effective size I feel at the moment and I'm not sure I want to add two independent homes into that perhaps councillor Staglard is here to tell me otherwise thank you chair I didn't want to dwell on that particular point chair but let me address the other things we might come back to that I think having an independent person around will jog us out of the potential for groups think we sit together as a committee for quite long periods and for somebody to raise a question which might be tricky but it can take us in a slightly different direction which might be beneficial so I think all the case and particularly the sip for recommendation for an independent person is in that direction they talk about technical expertise and so being able to pose a question I think or challenge some thinking would be appropriate and it's beneficial where you see independent experts in fields then that is their role now there is the potential to go seriously wrong if somebody is dominating and depending on personality type so I think that implies a good relationship for example with the chair so there is a good understanding and following along from council Williams points to have appropriate means of letting somebody go if it's really not working so I think that's important if you could get to I'm inclined to go along with council Sandford's point council make the committee a biggy pardon just too top heavy with independent expertise but I think one well chosen who is able to challenge and has a good relationship with the chair fits us in obviously with good practice and I think could be a great benefit to the committee Thank you councillor Stobart so thank you that has been a really helpful discussion I'm going to bring in some of the officers in just a moment I think firstly on the number I agree I think if this is something we pursue that at most one is to be preferred rather than looking to a point two I appreciate that is what is recommended in the SIPFA code of guidance but I think applying it to the specifics of this council and this committee I think one is a reasonable situation I agree with quite a lot of what councillor Hal and councillor Heather Williams had to say I do feel rather pushed into this rather than necessarily wanting to lead from it but you know it does feel slightly like the writings on the wall and we need you know and there would be perhaps some benefits to being a little proactive about it rather than absolutely being pushed into it so I'm sorry councillor Hal Chairman I agree I think we are pushed into this and it's not something I'm going to do the only thing I think is that whoever we get and whatever criteria is they really got to know local government finance from the outset because otherwise we are paying I don't know how much money it will be for them to sit here and look pretty and that's not their job the job is to actually do some work and I think that's going to be the big part of it all now how you interview somebody for that I mean that's for others to decide or maybe we all do it and they've got to be used to coming into a speaking and speaking in here and being online at the same time there's no wall flowers allowed so I don't know what accountants are not saying that accountants are wall flowers I would never say that especially not local government ones but we do need somebody who's happy to challenge and stick up their hand when the rest of us are going to put our hand up a different way thank you thank you councillor Hal I should also just reflect on some comments I've had on the committee meeting which have pointed out that although at the moment I think this committee is a really excellent balance of professional accountants and also definitely not professional accountants and we have quite a good mix at the moment there's no guarantee that that would always be the case in the organisation and that there's obviously no requirements for councillors or any councillors to be accountants and so perhaps we shouldn't depend upon that particular resource in perhaps the way that we do at the moment and that was an additional recent accountants sorry chair just on your comment there yes finance and understanding finance is really important but I because we start with audit there is the corporate governance side as well and I do think that if we're looking for somebody we need them to understand finance completely obviously you and I are very biased in that in our preference for the financial side given our occupations but I do think it needs to be somebody that understands local government and the governance side as well and we are sometimes because of the pressures we've had on the financial accounting I think we are sometimes in danger of looking more on that than the other side as it were so sorry to interrupt obviously because I'm potentially a wallflower as Councillor Howell said so I'll just demonstrate that I'm very much not thank you thank you Councillor Williams yes I've been called many things that's somewhere some better I think so I'm going to turn to officers here I think what I want to understand is what we need to design today and what the options are and I think specifically I'm minded what I'm minded and I'm happy for feedback on this is that we should seek changes to the constitution that give us the power and the right but not the obligation to appoint an independent member so give us the mechanism to do so but not require it and then we can think about how we go about advertising interviewing and selecting an appropriate candidate but all with a backdrop of this is a nice to have rather than something that's crucial to the committee so I don't know Murphy as our monitoring officer and can we frame this in the constitution as such a way is to give us that kind of maximum flexibility thank you chair and I've been following the conversation that I have read the report I suppose the answer is going to be it depends the easy bit is to work backwards by saying any change to the constitution must be by full council and prior to that it'll be something that goes to civic affairs so there's quite a lead up to any change as for the specifics of the empowerment your discretion or an ability to choose that for me would be a matter of wording that we could look to make in the change to the constitution but I think that's something we can explore but I see no reason why we can't try and give the committee some flexibility in terms of what they want to do thank you in terms of things like sorry I'll come to you in just a second thank you in terms of how specific the constitution needs to be on this matter do we need to agree things like the length of term or the length of service or the job description or any of that or can that be kept out of the constitution and agreed kind of separately I guess I want to put the minimum possible into the constitution because obviously then we're tied to that and keep as much as possible within the flexibility is that a kind of reasonable way to proceed would you advise thank you Jay I'd welcome the thoughts of my fellow officers but my personal view would be that we try to minimise the changes that we make to the constitution so for example on issues of the details of the appointment so to speak I think there is an advantage to being flexible and keeping things out of the constitution such as for example whether it's allowance or terms of office but that would be my preference the principle I would bring to what changes do we need to make and what don't we need to make thank you Mr Murphy sorry some of the councillors I think wanted to I think it's perfect to say that both of us are on a civic affair so we ought to declare that straight away we're both in civic affairs and although it is not I don't think it should be mandatory I think it would be fair to say that it would be a preference for me if the person lived in was on the electoral role in South Cambridge or for that matter in Cambridge that's a preference for me that I think we would like to highlight the civic affairs it's up to them in the end to make that decision thank you so having said all of that I think if we turn to the recommendations or the options are set out on page 80 I believe if I'm in the right place and so the options are written are sort of A do nothing B commence the process for appointing an independent member or C commence the process for appointing more than one independent member sort of I don't really know how best to capture what we've agreed in a sense I want to go with option B but have it say something more like you know commence the process for constitutional changes to enable the potential appointment of an independent member is kind of I feel where we've kind of got to Councillor Williams Thank you chair just a quick thing sort of considering this Councillor Howard and myself will abstain at this stage because we're members of civic affairs so then we can vote when it comes to civic affairs and we're not predetermined by a vote here we've expressed some opinions of regret having it but not we have neither because I've spoken really about how the constitution to be phrased and we think it's probably wise that we actually remove ourselves from that part of the debate so that we have don't have our hands tied later on and but of course we are listening and I'm sure you would expect us to reflect views from this committee when we represent the council of civic affairs Thank you Councillor Williams that's helpful to know so are the committee happy with that sort of slightly modified option B I think because as written it sort of commits us to appoint someone I think rather we want to start the process to give ourselves the power to do so if in fact we can find the right person is that Councillor Stobart Chair would you mind repeating the wording please Let's see if I can remember it Thank you so I think let me frame this correctly Commence the process for constitutional change to give audit and corporate governance the power to appoint an independent member I think from my point of view that would be fine I think not being too prescriptive I think we're heading in that direction aren't we of minimal change to the constitution but enough to give the chair and anybody else an authority the right to decisive or the possibility for decisive action if it's needed so that always needs to be in place but I would agree with the minimum and then interpretation in the hands of appropriately appointed people Thank you Councillor Stobart Councillor Harvey I can't completely remember what your sentence was but do we want to be a bit careful about in who that power is vested I mean is it Once we've created that power is that the council or is that this committee or the Yes Yes Yes, particularly where I said the power for the audit and corporate governance committee to appoint an independent member I should perhaps say the full council to appoint an independent member Thank you Councillor Harvey that's an excellent suggestion Are we happy then to give office sort of the formal decision like we've said the formal decision is going to come to Civic Affairs Mr Tully Thank you chair If it helps the committee the recommendation that paragraph 6 is worded to such that after sort of approving progress in this because we didn't want to do too much work in advance of a decision being made today that it's up for the chair and the chief finance officer to progress this forward and make necessary arrangements so that hopefully implies a degree of flexibility moving forwards and secondly if it's only assurance for the committee just to let you know that I have worked another council where there has been an independent person for a number of years and despite that committee being very well experienced having not knowledge they do comment that he adds a lot of value so having worked in that scenario it can be quite productive Thank you Mr Tully So I think we're happy to vote on this now so the recommendation is we it's not actually written in paragraph 6 let's see what I've got So I think the wording is probably option 12B as amended so it commenced the process for seeking changes to the constitution to enable full council to appoint an independent member Can I see all those Does this mean we're going with recommendation 6 paragraph 6 Yes, it's sort of 6 merged with 12B Thank you, can I see all those in favour of that recommendation please Thank you All those against and all those abstaining Chairman, we're not voting Not voting, understood Thank you Just before I move on the only thing I just spotted at the end there was that in the job just in the role description sorry under the additional information item 10 we need to be clear that that shouldn't exclude people who live in the district and their full pay council tax and do have a relationship with the authority because they will probably as Councillor Howland has indicated it would be good to have someone with some local knowledge and we would want to rule them out Thank you very much committee it's 5 minutes to 12 the remaining items are around the Treasury management both the annual report and quarterly performance there's the 6 month strategy risk report and there's also the key amnesty item and we have scheduled training at one o'clock on the important issue of counter fraud so my suggestion would be to take the Treasury management issues Treasury management items today although perhaps starting with the quarterly report as that's more up to date and to focus on that perhaps rather than the annual report and to defer this the strategic risk report and the key amnesty to our September meeting Is the rest of the committee happy with that? Am I prioritising the right things? I might start with number 11 because it's slightly more that's the most up to date item Councillor William Chair if I can suggest that we take number 11 and then if it's not going to be a problem defer the others just because we're starting at one we will need to have some sort of comfort of subsistence breaking between Yes it's hungry work this so I suggest yes so I'm going to propose that we defer items 6, 10 and 12 to the September meeting and that we'll take item 11 now and then close the meeting we're all happy with that Good Moving swiftly on to item 11 then is the Treasury management performance report Please can Mr Maddock present this report Thank you chair It follows on a little bit from the annual report so this is a new requirement to report to this committee on a quarterly basis you may recall that previously it was a half yearly basis it's probably being the first quarter of the year there's not massive amount to report you'll see from the table on our investment activity at power over of 18 on page 105 you'll see that our investments have changed slightly gone down a little bit we've obviously seen the impact of increasing interest rates when it comes to our borrowings so there's reference to that in paragraph 23 23 I might help you with the right panel 29 you can see that our borrowings have stayed static in the first quarter but they are down 10 million compared to earlier in 2223 we have our budget monitoring table there gives an indication of what our budget is for this year on particular Treasury related items and what our forecast out so it is again it's quite early in the year so it's quite difficult to really produce anything different other than we're pretty pretty clear now particularly because our borrowings are 10 million lower and we thought they were going to be it seems pretty clear that our interest payments will actually be less than we originally budgeted even though interest rates might be a bit higher the fact that we've got less borrowings will contract that and a bit so our estimate for interest payments is down at 1.5 million as opposed to 2 million in the original budget I don't think there's anything too much other than that to report I think I'd question particularly quarter one I'd question the usefulness of doing it on a quarterly basis but it is a requirement and I guess going through the process does add some value so it's there for the members to note and comment on that thank you Mr Manwick I mean my my reading of it is that we're still managing to borrow at the kind of three three and a half percent and we're earning more like four four and a half five percent on our investments and as long as that continues and that we're not exposed to our new risk there aren't kind of there aren't kind of major concerns here but I'll come to councillor how the Williams who wishes to come in chair I'm just wondering whether we have on or we've got a long list don't we of people that we invest with and don't invest with whether black rock is on there is black rock or any anything any of our documents moment where we could potentially have money tied up with I don't believe so under the annual report we have a list of the counter parties we used this is at page 98 so I don't believe I've seen them on there I haven't I just wanted to check in case there's anything historical there are some councils that do have black rock listed given the recent news I think in this council's priorities it might be best to ensure that we don't have any ties with them until we know exactly what's going on there Thank you councillor Williams Are there any further comments on this quarterly update Thank you very much we've been asked to we've been asked to note the report which we have done as previously mentioned we're going to defer those other items to our September meeting when hopefully there haven't been spanners thrown in various works by various other parties before then but we'll manage if they do Thank you all very much for your today we covered a lot of very useful ground and there was some very good discussion so thank you all very much The date of the next meeting is scheduled for Wednesday the 27th of September I'm aware that the forward plan for this committee has been has been changed perhaps from what members were expecting in the meetings are now moving around different days of the week and are not on a Thursday as I believe they always have been My suggestion is that I would like to request officers to look again at the forward calendar of dates and return these meetings to their regular sloth on an appropriate Thursday in the month unless any members have an issue with that simply because the new dates are presenting a lot of clashes for several members of the committee councillor Williams Normally dates are put in the calendar the annual calendar that comes to full council and sort of set so I don't know what we can do around that because it normally gets adopted by full council but I don't, did we not for audit when we did the calendar but I would be very supportive of us doing that annual calendar earlier than May because quite that would if you think I'm not funny this summer place times like this we have meetings where I'm not giving much notice and it is a time when that does create a lot of issues some for childcare, some for leave, annual leave and the like so if we're looking at adopting things earlier for the calendar I'd be very supportive of that Thank you councillor Williams I think it is within this committee's remit as to when it decides to meet so we can change the dates and we can look to perhaps try and nail down some dates earlier in the year as you say particularly around these summer months I mean I know for instance that there are meetings later in the year because it's moved to Tuesday that clashes with the county council full council which is obviously going to knock out at least two members of this committee and there are several other dates which are provoking county council clashes as well so does anyone object if it returns to a regular Thursday slot? I've no objection but can we also look at the GCP meetings because this committee's clash with that in the past as well because there are workshops on Wednesday the 27th of September but please be aware that there may be communication in the coming weeks to change that and that will be an absolute usual ways. Thank you all very much I declare the meeting closed


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