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Agenda and minutes

Items
Note No. Item

16.

Apologies for Absence.

Minutes:

The Chairman relayed apologies from Councillor Mrs Julie Ozog and confirmed that Cllr. Jan Ozog was attending the Board as a Substitute.

 

Liz Jackson and her colleague Matthew Dean from Grant Thornton UK [External Auditors] were welcomed to the meeting and Mrs Jackson congratulated on her recent marriage.

 

The Strategic Director (Internal Services) the Head of Legal Services and the Financial Services Manager were also welcomed to the proceedings.

 

The Chairman advised that there was an ‘Urgent’ item for consideration by the Board [Item 4] but proposed that it be taken after Items 6 and 7 in the published agenda [to be presented by the Head of Legal Services].

 

The Board agreed to the proposed change in the order of published business.

 

 

 

 

17.

Declarations of Interest.

To receive declarations of interest from Members including the terms(s) of any Grants of Dispensation.

Minutes:

There were no declarations of interest.

MD

18.

Confirmation of the Minutes of the meeting held on 29 June 2016 pdf icon PDF 130 KB

Minutes:

                        RESOLVED:

 

That the Minutes of the Audit Board meeting held 29 June 2016 be confirmed as accurate.

 

 

19.

References from Other Committees [IF ANY]

There are no references from other Committees at present.

Minutes:

There were no references from other Committees for the Board to consider.

20.

Annual Report 2015/2016 of the Monitoring Officer on the Review of Ethical Governance Arrangements and Ancillary Matters pdf icon PDF 48 KB

This Item is marked as ‘To – Follow’.

Additional documents:

Minutes:

The report, which had been marked as ‘To-Follow’ in the published agenda [page 6] was ‘tabled’ for consideration by the Board that evening. Members were asked to endorse the Monitoring Officer’s Annual Report 2015/16 on the Review of Ethical Governance Arrangements and ancillary matters, as set out in Appendix A.

 

The Head of Legal Services & Deputy Monitoring Officer reminded the Board that the report was a standard item considered each year and that the format of the report remained unchanged.

 

In response to a specific request from the Vice-Chairman to summarise the salient points in the 2015/16 report, she briefly advised Members of relevant new legislative requirements regarding the Council’s Constitution, anti-slavery obligations [Modern Slavery Act 2015] and impending changes to the Data Protection Act 1998. The Government’s Brexit negotiations [when concluded] would be likely to further impact on current legislation.

 

Members were advised that the Review had encountered two areas of concern regarding, respectively, out of date Parish Council websites and the need to ‘chase’ one Parish Council for its DPI registration forms. These issues had caused difficulties in the collation of accurate data regarding DPIs (Disclosable Pecuniary Interests) for serving Parish Members. The Head of Legal Services explained that the late submission of DPI forms to the Monitoring Officer had been resolved and that it was the responsibility of Parish Clerks to maintain accurate Parish Council records, including websites. Members suggested that this message be re-enforced to Parish Clerks at the next Parish & Borough Forum [11 October 2016].

 

The Head of Legal Services added that; there appeared to be a measure of confusion amongst Members as to what properly constituted a DPI. If any Member was in doubt over a specific interest they should seek advice from the Monitoring Officer or herself as Deputy Monitoring Officer or in their joint absence, the Member Services Manager.

 

The Shadow Leader advised that he felt he had been unable to properly digest the contents of the Monitoring Officer’s Annual Report for 2015/16 as tabled that evening. He held no concerns over its accuracy and comprehensive nature, but as Shadow Leader and Chairman of the Scrutiny Committee, he needed more time to fully consider the papers and properly comment as appropriate.

 

The Chairman noted the Shadow Leader’s concerns in light of which, the Board RESOLVED:

 

(i)            That endorsement by the Board of the Monitoring Officer’s Annual Report 2015/16 on the Review of Ethical Governance Arrangements and ancillary matters (as set out in Appendix A to the covering report) be deferred for 14 working days from the date of the meeting [until 11 October 2016] pending any written representations from the Shadow Leader of the Council;

 

(ii)          That in the absence of written representations from the Shadow Leader [within 14 working days from the date of the Board], the report be considered as endorsed and that that status be formally confirmed at the next meeting of the Board in January 2017.

21.

Complaints Monitoring and Procedure Review - 2015 / 2016 pdf icon PDF 106 KB

To provide Members with information on the Council’s Corporate Complaints Procedure, including the number and nature of complaints received in respect of the services provided by the Council, during the period from 1 April 2015 to 31 March 2016.

 

 

 

 

Additional documents:

Minutes:

The report and Appendices provided Board Members with information on the Council’s Corporate Complaints Procedure, including the number and nature of complaints received in respect of the services provided by the Council, during the period 1 April 2015 to 31 March 2016.

 

The Head of Legal Services advised that the report was another standard item presented each year.  She advised that there were no updates to the information provided on agenda pages 40 and 41 and offered to take questions.

 

The Shadow Leader asked, with specific regard to process and lessons to be learnt from complaint handling [report para.3.20 (f) agenda p.23] what role Members played with regard to policy change.

 

The Chairman gave as an example of Member involvement in the Council’s complaints process and possible impact on policy; his own role as ‘designated person’ for the Council in the resolution of complaints relating to the Council’s function as landlord. As ‘designated person’ the Chairman sought to resolve issues at the local level prior to referral to the Housing Ombudsman. Following his consideration of a recent housing complaint, he had asked Officers to amend an ambiguous housing form.

 

The Head of Legal Services confirmed the Chairman’s role as the Council’s ‘designated person’ for Housing landlord related complaints and advised that the 2016/17 complaints procedure review report would include information on how the information from complaints is used to improve working practices and/or policy.

 

The Shadow Leader expressed his surprise that only 2 (two) housing complaints had been recorded in the period under review [table agenda p.22 – report para. 3.20 (c)] this seemed low in the context of his own constituency work ‘In-tray’.

 

The Chairman explained that only 2 complaints had been referred to the Housing Ombudsman in 2015/16. The vast majority of housing complaints were resolved by the Housing Department at Stage 1 level, or failing that, referred to a separate Council Department for Stage 2 resolution. If the complainant was still not satisfied following the Stage 2 decision, they were referred to Councillor Hammock as the Council’s ‘designated person’, together with the contact details of the Housing Ombudsman. Complainants could then choose to approach the ‘designated person’ immediately following Stage 2, or wait 8 weeks from the date of the Stage 2 decision and take the matter direct to the Housing Ombudsman. If the ‘designated person’ considers and rejects the complaint against the Council, the complainant may still approach the Housing Ombudsman within the 8 week period following the Stage 2 decision.

 

 

 

 

                        RESOLVED:

 

1.    That the Complaints Monitoring and Procedure Review – 2015/16 report and Appendices be endorsed;

 

2.    That the Head of Legal Services be thanked for her further explanations in support of her comprehensive report.

 

 

  

 

22.

Urgent Item - Detection of Council Tax Fraud by Agency Staff in the Council's Joint Revenue & Benefits Section

The Chairman will announce his decision as to whether there are any urgent items and their position on the agenda.

Minutes:

The Chairman advised Board Members that the Staff Manager for the Council’s joint Revenue & Benefits Section operation with Sevenoaks Council had detected an incident of Council Tax fraud amounting to £2K committed by a temporary staff member recruited from an agency.

 

Press coverage of the crime had reported fraud amounting to some £90K with the intimation that the Council had been the sole victim. However, subsequent enquiries with other local authorities [who had previously employed the culprit] revealed that Hackney Council in London had been the major victim and that the Council had only suffered losses amounting to £2K. The Leader of the Council had immediately issued a Press Statement to this effect to counter the misleading press article and help repair the Council’s reputation in the eyes of the Dartford public.

 

As a result of the fraud detection, the Council had tightened up its security checks for both agency and permanent staff and agency staff no longer worked in the Revenue & Benefits Section. The Section’s Staff Manager had been thanked by the Managing Director and the Strategic Director (Internal Services) for his vigilance and prompt action in saving the Council from further financial losses.

 

In response to subsequent specific questions from Board Members the Chairman and the Strategic Director (IS) confirmed the following points:

 

·         There was no recourse to be obtained from the recruitment agency for failing to properly vet its client(s) before appointment by the Council;

·         It was the responsibility of the Council to ensure that agencies had undertaken all appropriate checks of candidates prior to appointment by the Council and Officers were reviewing procedures in this regard;

·         The Council would also be undertaking its own checks in the future, for both agency and permanent staff, to ensure applicants had the legal right to work in the U.K. and did not hold a criminal record;

·         Agency staff no longer worked in the Revenue & Benefits Section;

·         The bona-fides of agency staff working in other Sections of the Council were in the process of being confirmed;

·         A report would be submitted to a future meeting of the Board updating Members on the action that had been undertaken to verify the bona-fides of agency staff currently employed by the Council, in addition to detailing action taken by the Council with recruitment agencies  to ensure that any and all candidates referred to the Council for employment had been properly vetted by the agencies beforehand;

·         The Council had worked with Kent Police to obtain a 2 year conviction of the offender for the offence committed in Dartford.

 

The Shadow Leader asked:

 

(i)            Why all Councillors were not being briefed by the Audit Board Chairman;

 

(ii)          Why the Audit Board, as the due body, had not considered the topic prior to the Press Statement being released by the Leader of the Council, which had effectively pre-empted the Board’s view of the incident and any recommendations it might have made.

 

The Chairman advised that the Leader’s Press Statement had been required to issue as soon  ...  view the full minutes text for item 22.

23.

Report from the External Auditor pdf icon PDF 53 KB

To consider the report and letter from the Council’s External Auditor, Grant Thornton UK, LLP.

Additional documents:

Minutes:

The covering report from the Financial Services Manager (FSM) informed the Audit Board that the External Auditor had completed the audit of the Council’s 2015/16 Accounts and that her ‘Audit Findings’ report was presented to Members for consideration (attached as Appendix A to the covering report). Members were also asked to approve the Letter of Representation attached as Appendix B.

 

Liz Jackson, Engagement Lead, Grant Thornton, UK advised Board Members that her ‘Audit Findings’ report proposed an unqualified opinion in respect of the Council’s 2015/16 Accounts and value for money (VfM) conclusion, that no misstatements had been identified in the Accounts. The report made two recommendations, one related to bank reconciliations which had been implemented, the second recommendation related to the Council’s Financial Plans. The External Auditor had pointed out that the recommendation was not specific to Dartford Council but reflected the reducing central government grant for all local authorities in England and Wales.

 

The Chairman endorsed the comments of the External Auditor and asked that the appreciation of the Audit Board be passed to the Council’s finance team by the FSM. 

 

                                    RESOLVED:

 

1.    That the Audit Board Members noted and welcomed the intention of the External Auditor to issue an unqualified opinion on both the Financial Statements for 2015/16 and the Value for Money (VfM) Conclusion as set out in Appendix A to the report;

 

2.    That Board Members approved the Letter of Representation attached as Appendix B to the report;

 

3.    That the Board’s appreciation of the efforts of the Council’s finance staff in the preparation of the 2015/16 Accounts be relayed by senior managers present.

24.

Financial Statements (Statement of Accounts) 2015/16 pdf icon PDF 48 KB

This report present’s the Council’s Statement of Accounts for the period 1 April 2015 to 31 March 2016.

Additional documents:

Minutes:

The report presented to the Audit Board the Council’s Statement of Accounts for the period 1 April 2015 to 31 March 2016.

 

Board Members were asked to adopt, approve the publication of, and authorise for issue, the 2015/16 Statement of Accounts as a formal requirement to enable the External Auditor to issue her unqualified opinion on both the Accounts and the Value for Money (VfM) Conclusion, as set out in the previous agenda item [Min. No. 23 refers].

 

The Financial Services Manager (FSM) reminded Members that the Statement of Accounts was prepared in accordance with ‘proper accounting practice’ i.e. with regard to all the accounting rules issued by the Accounting Standards Board and the CIPFA Code of Practice on Local Authority Accounting. Those Accounting rules differed from the statutory regulations that the Council was required to follow; the local authority accounts demonstrated how the two regimes were reconciled. Adherence to the accounting rules ensured consistency between years and between organisations.

 

Members were advised that the Accounts were complex and comprised off a few core statements supported by several “disclosure notices”. The FSM drew out the following more important elements of the 2015/16 Accounts for Members:

 

·         The Comprehensive Income and Expenditure Statement (CIES) [agenda p.119] effectively showed the surplus of deficit (using proper accounting practices) for all the services provided by the Council including council housing;

·         The CIES showed an “accounting” surplus for 2015/16 of £51.3M most of which comprised unrealised gains represented within the unusable reserves. A significant part of the surplus was due to property revaluations also reflected in the unusable reserves plus a positive adjustment to the pensions reserve due to a change in valuation;

·         Reconciliation of the CIES with the reserve balances on the Council’s statutory General Fund at year end [31 March 2016] was reflected in the Movement in Reserves Statement (MIRS) [agenda p.117];

·         The CIES comprised both the General Fund and the Housing Revenue Account these were shown separately in the MIRS which started from opening balances as at 31 March 2015 then the surplus (or deficit) line on the provision of services from the CIES which totalled £11.7M in reserves for 2015/16;

·         The MIRS then adjusted the surplus figure with a line of Adjustments [between accounting and funding basis] which needed to be reversed out. The main accounting adjustments that had been required were to the cost of using assets (depreciation and impairment), revaluations and the different way pensions were treated between accounting and the General Fund;

·         The position of the General Fund had been reported to Cabinet in July [Min. No. 25] with no subsequent changes to that position as set out in the Narrative Statement for the Accounts [agenda p.98 and 99];

·         The MIRS showed that the Council had a total of £38M in usable reserves of which £4M was specifically for capital, £12M related to housing and £17.6M for the General Reserve;

·         The increase in general reserves had derived in the main from gains from business rates of £780K from 2014/15,  ...  view the full minutes text for item 24.

25.

Progress Report on Internal Audit Annual Plan 2016/17 pdf icon PDF 50 KB

This report provides Members of the Board with information regarding the progress of the Internal Audit Team in delivering the Annual Internal Audit Plan 2016/17.

Additional documents:

Minutes:

This report and Appendices provided Members of the Board with information regarding the progress of the Internal Audit Team in delivering the Annual Internal Audit Plan 2016/17.

 

The Strategic Director (Internal Services) referred Members to the table that formed Appendix A to the report which detailed the actions and stages reached for the 10 (ten) audits currently in progress. With regard to Appendix B she advised that the training of the 2 new team members and the continued absence of the Audit Manager on sick leave had impacted on the actual work days completed against the expected work day estimate.

 

The Audit Plan would be kept under review going forward to allow for the continued impact of staff training and further sick leave as appropriate.

 

 

                        RESOLVED:

 

1.    That the report and Appendices be noted. 

26.

Review of Internal Audit Recommendations - Progress Report pdf icon PDF 48 KB

This report is to update Members on progress of the implementation of recommendations agreed with Management during this year, and to report on outstanding recommendations due for implemented by 31 July 2016.

Additional documents:

Minutes:

This report and Appendices updated the Board on the progress that had been made in the implementation of recommendations agreed with Management during the year (Appendix A) in addition to reporting on outstanding recommendations due to be implemented by 31 July 2016 (Appendix B).

 

Members were referred to Appendix B of the report and advised that the outstanding Recommendation concerning HR policies and procedures (agenda p.220) had been progressed since the report had been issued and that the Recommendation was now at the ‘Draft’ stage.

 

The Shadow Leader noted that the language used to describe the ‘Latest Position’ regarding the audit of IT Security 2013/14 (agenda p.218) was in the old format that Members had asked to be revised to include a reference to the ‘source’ for the update and a meaningful timeline.

 

The Strategic Director (Internal Services) undertook to relay the point to the Audit Team for amendment and future presentation.

 

                        RESOLVED:

 

1.    Audit Board Members noted the reasons for delayed implementation of audit recommendations as set out in Appendix B to the report;

 

2.    The Board endorsed the revised dates for implementation provided by Management as noted in Appendix B.

 

 

27.

Audit Reports Issued Since Last Meeting of the Board pdf icon PDF 56 KB

This report is to inform Audit Board Members of the outcomes of audits completed since the previous report to the Board in June 2016 and to provide Members with the opportunity to request clarification or further information, if considered necessary.

Additional documents:

Minutes:

The report and appendices informed Audit Board Members of the outcomes of audits that had been completed since the previous report to the Board on 29 June 2016 and gave Members the opportunity to request further clarification or more information as deemed necessary.

 

Members were advised that all 9 (nine) audit reports listed in Appendix A had been finalised. Seven reports had received a ‘Good’ Opinion for both Framework and Compliance; one report had been marked ‘Satisfactory’ for both categories and one report had received a ‘Substantial Assurance’ audit Opinion.

 

 

                        RESOLVED:

 

1.    That Audit Board Members noted the contents of the report.

28.

Selective Invoice Checks pdf icon PDF 58 KB

Following the meeting of the Board in June 2016, Members selected five creditor payments for checking in order to ascertain the probity and accuracy of the transactions. This report summarises those payments and provides the opportunity to select further payments for checking, if required.

 

 

 

Minutes:

At the last meeting of the Board on 29 June 2016 Members selected five (5) creditor payments for checking. The report advised Members of the outcome of that exercise.

 

The Board were advised that all payments selected by Members on that occasion had been found to be in order and in compliance with the Council’s procedures.

 

Members were invited to select five (5) further creditor payments for examination by the Internal Audit Team and subsequent reporting to the Board in January 2017.

 

 

                        RESOLVED:

 

1.    That Members noted the contents of the report and that five (5) further payments were selected for checking by Internal Audit and the outcomes reported to the Board in January 2017.

29.

Future appointment of External Auditors pdf icon PDF 70 KB

This report provides an update on the arrangements for appointing External Auditors following the abolition of the Audit Commission and the ending of the transitional arrangements at the conclusion of the 2017/18 audits and proposes a preferred procurement route for recommendation by the Board to the General Assembly of the Council for decision on 10 October 2016.

Minutes:

The report provided an update to Board Members on the arrangements for appointing external auditors following the abolition of the Audit Commission and the ending of the transitional arrangements at the conclusion of the 2017/18 audits. The report recommended, as a preferred option, that the Council opt into a sector led body to negotiate the appointment of an external auditor [post 2017/18] and that the General Assembly of the Council (GAC) be asked to approve the recommendation.

 

The Strategic Director (IS) confirmed for Members that the update report followed on from previous reports presented to the Board in March and June 2016 [Min. Nos. 57 and 15 refer] which had outlined three options for consideration by the Board and recommendation to the GAC. Those options remained as previously reported:

 

·         Option 1 – procuring a stand-alone appointment overseen by a specially set up independent Audit Panel: this option provided no economies of scale [with other Kent Councils] and would incur costs associated with the recruitment of independent members and the maintenance of an Audit Panel;

 

·         Option 2 – joining with other councils to set up a joint independent Auditor Panel: this option would present economies of scale but would also distance the decision making body [the Audit Panel] from the local input of the Audit Board;

 

·         Option 3 – opting into a sector led body: this was the preferred option for recommendation to the GAC. It was the most cost effective option, offering economies of scale and dispensed with the need and cost of an Audit Panel.  With one possible exception, all the other Kent authorities were opting for the sector led approach and the appointment of a single external auditor for Kent should ensure audit fees were competitive.

 

Members were advised that the Council had expressed their interest in supporting Option 3 - a sector led body approach - to the Local Government Association (LGA) before their deadline of 30 April 2016.

 

The Strategic Director (Internal Services) explained that the Council now awaited a formal invitation from Public Sector Appointments Ltd (PSSA) the public sector body appointed by the Secretary of State and established by the LGA, to take matters forward. Once a formal invitation had been received by the Council from the PSSA, the Board’s recommendation would be put before the GAC for final decision.

 

                        RESOLVED:

 

1.    That the General Assembly of the Council (GAC) be recommended to approve a public sector led approach to the negotiation and appointment of the external auditor for the Council; as the preferred procurement route; upon receipt of a formal invitation from the public sector body PSAA to participate in such an appointment exercise.