| Place: | Wheel Room, Civic Centre, West Paddock, Leyland PR25 1DH |
| Present: | Councillor O'Hare (in the chair) Councillors Breakell, Hamman and A F Ogilvie |
| In attendance: | Corporate Directors (Policy and Neighbourhoods) (John Dakin) and (Resources) (Mike Nuttall), Head of Corporate Governance (Maureen Wood), Risk Manager (Andy Armstrong), Principal Auditors (Dawn Highton and Clare Ware), Democratic Services Officer (Carol Eddleston) and the Cabinet Member for Finance and Resources (Councillor S Robinson) |
| Public attendance: | 0 |
| Other Officers: | Garry Barclay (Head of Shared Assurance Services) Other Members:- Councillors Clark, Foster, Jim Hothersall, Mrs M Smith, P Smith, Titherington and M Tomlinson. |
| Item | Description/Resolution | Status | Action | |
|---|---|---|---|---|
| OPEN ITEMS | ||||
| 23 |
Apologies for Absence An apology for absence was submitted on behalf of Councillor Mrs Ball. |
Noted | ||
| 24 |
Declarations of Interest Councillor Ogilvie stated that, as the Cabinet Deputy for Regeneration and Planning (Planning and Economic Development), he would not take part in any discussion concerning that portfolio. |
Noted | ||
| 25 |
Minutes of the Last Meeting Minutes attached The chairman reminded members that the committee had been provided with an update on the Building Control Account from Councillor Hughes, as agreed at the September and November meetings. RESOLVED: That the minutes of the meeting held on 26 November 2009 be approved as a correct record and signed by the chairman. |
Agreed | ||
| 26 |
Interim Report on Internal Audit as at 27 November 2009 Report attached The Internal Audit Manager presented the second interim report for the current financial year which provided a snapshot of overall progress, more detailed information on the audit work undertaken since the last meeting and information on the Internal Audit performance as at 27 November 2009. She explained that Internal Audit met with members of the Senior Management Team (SMT) before Christmas to discuss their requirements for the next financial year. Risk assessments were then carried out on proposed areas of work and high risk areas were included in the Audit Plan for the coming year 2010/11. She tabled the risk assessment for 2009/10 as an example of how the audit plan was pulled together. She said that she and the Head of Shared Assurance Services would be happy to meet with members if they had any particular areas of concern which they would like Internal Audit to look at. Members welcomed the opportunity to make suggestions to Internal Audit. In response to an observation from Councillor Breakell about the audit of the car parking (new arrangements) being ?in conjunction with Chorley?, the Internal Audit Manager confirmed that car parking had been in the original plan for South Ribble and it had also been requested by Chorley Borough Council. As there were some areas of commonality then it was hoped that a joint planned approach to both audits would provide an example of the partnership generating some efficiencies. Members then asked a number of questions about the appendices to the report. The chairman noted that only a small number of audit areas had been completed and of those that had, several had used more time than originally allocated. The Internal Audit Manager acknowledged that a couple of areas had overrun. With regard to Estates, the extra audit time used to look at invoices had proved to be invaluable as it had identified an outstanding payment of ?20K due from one tenant that appeared to be overlooked and enabled a weakness in the process to be corrected. With regard to the overrun on Commercial Services, she explained that there had been an underestimate of the time involved in what had been the first piece of work undertaken in the new Shared Services arrangement. Should the same area be audited again, careful consideration of exactly what was to be reviewed would be given before a more realistic estimate of audit days was calculated. Councillor Ogilvie was concerned that there still seemed to be difficulties in delivering the Audit Plan in Quarter 2. He had raised this concern at a previous meeting and been assured that resources were sufficient to allow the Audit Plan to be delivered. He asked for assurance that the remainder of the plan could be delivered. Mrs Ware said that Internal Audit was fairly confident at the moment that it could deliver the Plan. The internal transfer of one auditor to Information Services constituted a loss of approximately 20%. The partnership could buy in additional resources or they could hold the vacancy and offer as an efficiency to the council. Any recruitment to the post would not be considered before the new financial year. The Internal Audit service was supplemented by buying in additional expertise from Lancashire County Council, but as yet it was not clear how many days LCC would be providing. In response to a question from Councillor Foster about any decision not to recruit to the vacant post and any detrimental effect on Internal Audit?s ability to deliver the service, the Head of Shared Assurance Services (Garry Barclay) confirmed that there had been no instruction not to fill the post. The post could be filled now but because of timing difficulties, the resource freed up by the vacancy would be used to buy in resources from LCC in order to enable the Audit Plan to be delivered this year. At the chairman?s request, the Internal Audit Manager explained the Audit Commission?s National Fraud Initiative in more detail. Data provided to the Audit Commission by this council allowed comparisons to be made between the Electoral Roll and Council Tax records which in turn identified a number of claims for single person discount that may require further investigation. Additionally, the Benefit Enquiry Unit worked with the employers of benefit claimants to identify any incorrect or fraudulent claims. Whilst it might not ever be possible to prevent all fraud or possible overpayments, the various initiatives and anti-fraud hotlines were very well publicised and the Shared Services arrangement allowed both South Ribble and Chorley Borough Councils to share good practice and learn from each other. In response to a comment from Councillor Clark about discrepancies between the electoral roll and known property occupation, members were informed that any concerns could be reported to the Benefit Enquiry Unit or the Council Tax Office. Members could also use the fraud hotline if they preferred. In response to a question from the chairman about the Building Control operation, Principal Auditor, Dawn Highton, confirmed that all areas of the function were reviewed, including budget monitoring. Internal Audit had found that the service had improved over the last few years but they had made some recommendations which the service had subsequently implemented. In response to a request from the chairman, Mrs Ware explained why the report was seeking deferrals for a number of items. With regard to the Leisure Contract, Mrs Ware explained that this had been in the 2008/09 Audit Plan. However, a good deal of preparatory work had had to be done to support the introduction of the Shared Service arrangements with Chorley on 1 April 2009, which meant that the work on the Leisure Contract was delayed until 2009/10 and that it had been completed in quarter 2. With this in mind, it was considered that a new review would not add much value at this stage and, therefore, the committee was being asked to approve a request for deferral of this work until quarter 1 of 2010/11. With regard to the funding in respect of the Local Strategic Partnership for which SRBC would be the accountable body, the monies were not now expected to be received before February 2010, hence the request for deferral of this work. With regard to transport, the Head of Service had requested a deferral as the service was in the process of procuring new vehicles and introducing neighbourhood working. It was therefore considered to be more appropriate for audit work to be undertaken once the vehicles had been procured and the new working arrangements implemented. In response to the chairman, the Internal Audit Manager said that Internal Audit was happy to accept the explanations from the Head of Service on the understanding that the Internal Audit work would commence in quarter 1 of 2010/11. In response to a request for clarification from Councillor M Tomlinson about the statement in bullet 3, page 2, about the deferral of the audit of car parking arrangements, Mrs Ware explained that this was to ensure that there would be some detailed information about the new arrangements available for the Internal Audit service to look at. Before inviting members to consider whether to grant the requests for deferral the chairman received confirmation from the Head of Shared Assurance Services that there were genuine, practical reasons for not conducting the audits concerned at this stage. RESOLVED: 1) That the committee welcome the report and the responses provided to members? questions, and 2) that the committee approve the following deferments requested in the report: External/Partnership funding Car Parking (new arrangements) Transport (with procurement) Leisure Contract |
Agreed | ||
| 27 |
Half Yearly Risk Report 2009/10 and Revised Corporate Risk Register 2010/11 Report from Head of Shared Assurance Services attached The Cabinet Member for Finance and Resources presented the report which showed both progress made mid way through the current financial year to implement a range of projects and actions in the Corporate Plan and individual Service Plans that aimed to address the risks and opportunities in the 2009/10 Corporate Risk Register and also the revised Corporate Risk Register for 2010/11 which contained nine key risks. Andy Armstrong, Risk Manager, explained that the information had been taken from the council?s performance management system, TEN, along with meetings with individual Heads of Service. He explained that the higher the risk, the greater the priority given to it and acknowledged that there needed to be more objective assessments so that any areas of weakness could be identified. He explained that Appendix 1 constituted a revised system of monitoring key corporate risks, essentially by aligning corporate risks with the management of performance of the corporate key projects / actions that provided the mitigation to the risks. In response to Councillor Breakell, the Risk Manager explained that TEN was the computer system that the council used for collecting corporate performance information and it was indeed only as good as the information that was input to it. The chairman pointed out that it seemed to be a very simplistic report but there was obviously a great deal of detail behind it. The Risk Manager confirmed that a great deal of thought had gone into the process and if members looked at the Corporate Performance Report they would be able to see much more information about the individual projects and actions. Underpinning each of those were detailed project plans, risk assessments and action plans. The chairman noted that the level rating for all projects in Appendix 1 was green and he asked whether it would be more appropriate for an independent ?overseer?, such as Internal Audit, to challenge an assessment of the risk rather than an evaluation by the Head of Service concerned. It may be in the interest of the Head of Service to ?hide? any problems and say that things were okay. The Risk Manager said that plans were being made to improve the robustness of comments put into the Corporate Performance Report but there had to be a certain level of reliance on the integrity of Heads of Service and he did not believe that they had mis-represented progress made on their projects. The Head of Shared Assurance Services said that work was being undertaken to make projects SMARTer so that they could be more effectively measured and monitored. Councillor Ogilvie suggested that it was important to have an element of independence in calculating the risk level rating and also in challenging project reporting. The Risk Manager explained that after the first six months of the current financial year the key corporate risks were considered to be being managed effectively but this was no guarantee that they would all be green in the year end monitoring report. Officers pointed out that SMT challenged quarterly performance reports and Internal and External Audit looked at the way that data was collected and reported. Equally, elected members were also able to offer up challenge and the Scrutiny Committee looked at progress on the Corporate Plan on a quarterly basis. Councillor Foster questioned to what extent the council was managing its risks effectively as the joint building project with LCC had now fallen by the wayside. This had been highlighted previously as a huge risk. He suggested that the potential disbanding of Lancashire Locals also showed that the council was not managing its risks effectively. The Cabinet Member for Finance and Resources observed that the council could only manage the risks which were within its control to manage. The two issues raised by Councillor Foster were not within this council?s control. With regard to the joint building project, the Corporate Director (Resources) explained that the risk identified previously with the proposed project had been around managing the disruption and impact on services that would have occurred as a result of taking forward the project. The decision taken by LCC not to proceed meant that the risk of disruption and impact no longer existed, hence the gap against the project in the monitoring statement. Councillor Clark commended the report as excellent and pointed out that any projects that were not on track would be reported to either the Governance or Scrutiny Committee. It was important to note that the scores and ratings in any report were based on information at one particular point in time and that information was subject to change, as were the scores. Councillor M Tomlinson welcomed the committee?s challenge of the report and pointed out that he would have been happier if reference to the joint building project had been removed as the gap in information had only resulted in confusion. He questioned the green project level rating against local transport issues including car parking, when, in the previous agenda item, the committee had agreed to a deferment of the audit of car parking to allow time for the new arrangements to be embedded. Councillor Titherington also expressed surprise at the green and ?on track? rating for this item. When the six-monthly budget monitoring report had been brought to committee he had commented on the shortfall and pointed out that it was within this council?s control. The Risk Manager said he did not believe it would have been appropriate to remove the joint building project from the register as this would have led to questions. With regard to the local transport issues rating, he acknowledged that the rating colour may not be green by the time the year-end report was brought to committee but he pointed out that the rating was based on an assessment of the totality of the projects and actions for that particular risk. In response to an observation from Councillor Titherington that an amber rating would have been easier to accept, the chairman pointed out that it was not an individual opinion but rather a system that helped to form a score and rating. Councillor Ogilvie said that it would be useful to have a briefing at a future meeting to explain the background to how the score and rating was arrived at for key project/action no 7. This might provide the committee with assurance that a sufficient level of independence and objectivity was already in place. The Corporate Director (Policy and Neighbourhoods) pointed out that it was still relatively early days in the new Governance/Scrutiny arrangements. Detailed progress information on the Corporate Plan was reported to the Scrutiny Committee in accordance with the recently agreed protocol. The chairman pointed out that this committee was looking to ensure that systems and processes were in place to monitor risks rather than to evaluate the actual performance of areas such as car parking. The Risk Manager explained that Appendix 2 contained the risks identified for 2010/11 and would form the basis of monitoring carried out in that year, he asked for confirmation that the committee was happy with this. RESOLVED: 1) That the committee note the progress made to address the key strategic risks during 2009/10 shown in Appendix 1 of the report, and 2) That the committee receive a brief of the work undertaken with regard to Key Project/Action no 7 and an explanation of how this work resulted in a green project level rating and provided mitigation for the various risks. 3) That the committee approve the draft Corporate Risk Register 2010/11 shown in Appendix 2 of the report. |
Agreed | ||
| 28 |
Corporate Governance Progress Report Report attached The Head of Corporate Governance presented a report on progress made to strengthen the council?s governance arrangements. The Action Plan at Appendix A included recommendations from this committee together with areas for improvement identified in the review of the council?s governance arrangements reported to this committee in June 2009. The chairman noted that this committee received the Annual Governance Statement in June and September and questioned whether it ought to be able to consider it sooner. The Head of Corporate Governance explained that the review process commenced in March and was quite extensive with the result that it was ?hot off the press? when it came before committee in June. External Audit was generally very happy with the work done. In response to Councillor Breakell, the Head of Corporate Governance said that the Corporate Governance Officer Steering Group had been formed in 2003 and was made up of the Corporate Directors (Policy and Neighbourhoods) and (Resources), the Heads of Corporate Governance, Policy and Community Engagement, Shared Assurance Services and Shared Financial Services and the Legal Services Manager. In response to a question from the chairman, the Corporate Director (Policy and Neighbourhoods) confirmed that officer time had been the only cost to the council for developing the Audit Commission?s Partnership Evaluation Tool. RESOLVED: That the committee note the Corporate Governance Progress Report and look forward to a further report at its June meeting. |
Agreed | ||
| 29 |
Treasury Management Progress Report Report attached The Cabinet Member for Finance and Resources presented the report which provided an update on Treasury Management activity, performance in 2009/10 and compliance with the Treasury and Investment Strategies. In response to a comment from Councillor Foster, the Cabinet member agreed that the last line of page one of the report should be amended to read ?before formal consideration by the Council...? The Clydesdale Bank interest rate of 6.69% had enabled the council to have received a return of 1.81% in the period to 18 December and, in response to a query from Councillor Hamman, the Cabinet member confirmed that this was a fair calculation as the LIBID (7 day London Interbank Rate), which had been used to make this calculation, was the standard benchmark. In response to a question from Councillor P Smith, the Cabinet member said that interest rates were forecast to remain low for most of 2010. In response to a question from the chairman, the Cabinet member confirmed that when funds were released from Heritable Bank they would go straight into a cash account. So far about 29% of this council?s deposits had been returned. In response to a question from the chairman about how any potential losses might be absorbed, the Cabinet member explained that the Local Government Association (LGA) had been looking for a commitment from the government to defer the losses for a further year to 2011/12 but this was not looking likely. Currently impairment could be deferred to 2010/11 although the LGA was trying to secure agreement to capitalise any losses and allow them to be written off over a longer period. Regarding the council?s own bank, the chairman asked for an explanation of why the permissible limit of ?3m had been exceeded on four separate occasions and Councillor Titherington asked about the reason for the limit. The Cabinet member informed the committee that the ?3m was not a statutory requirement but was a figure agreed in the council?s Treasury Management Strategy. On rare occasions, however, such as when a precept was to be paid out 48 hours later, it would not be worth moving money to another short term deposit account for a very short period. In response to an observation from the chairman that there appeared to be a discrepancy between the average amount of investments plus cash of ?14.103m on page 2 and the fund total of ?15.023m on page 7, the Corporate Director (Resources) explained that the first figure was an average to date i.e. the first nine months of the financial year. In response to a question from Councillor Titherington about why the deposits in Heritable Bank and Landsbanki Islands were excluded from the balance sheet, the Cabinet member explained that this was because the funds were not currently within the council?s grasp and it was not yet known how much of the funds would be returned in the longer term. In response to a comment from the chairman that some funds had already been returned from Heritable Bank, the Corporate Director (Resources) acknowledged that the figures could be presented differently for future reports. With regard to Landsbanki, the Cabinet member confirmed that the recent action taken by the President of Iceland would not affect this council. All local authorities and charities had preferential status within the administration although this was open to challenge by unsecured creditors. In response to a comment from Councillor Clark, the Corporate Director (Resources) explained that the council was legally obliged to have agreed a revised Treasury Management Strategy in advance of the new financial year and, as such, the usual timeframe for consideration and approval in February was appropriate. Any necessary changes to the strategy were reported to and considered by this committee on a quarterly basis. RESOLVED: 1) That the committee note the Treasury Management Progress Report, and 2) That future reports present net figures relating to Icelandic Bank deposits rather than gross figures, and 3) That the committee look forward to receiving the revised Treasury Management Strategy at its next meeting for consideration prior to it being submitted to Council for consideration prior to the start of the new financial year. |
Agreed | ||
| 30 |
Constitution Task Group In response to a question from Councillor P Smith, the Corporate Director (Policy and Neighbourhoods) said that he, as Monitoring Officer, had to ensure that the Constitution was fit for purpose and overseeing of the document now fell within the Terms of Reference of this Committee. In response to a comment from Councillor Breakell that he could not find much fault with the current Constitution, the chairman confirmed that although the committee was charged with reviewing it, it might not feel that much needed changing. The chairman said that the size of the Constitution meant that it would not be possible for the Task Group to look at the whole of it in time for the April Council meeting. He suggested that the group should concentrate its efforts on agreed parts on a rolling basis, with his immediate recommendation being how the Council and Cabinet work together and how members work in Council and committees. Councillor M Tomlinson said that he had discussed the matter with the group chairman following the last meeting and they had agreed that, as the work would be of an apolitical nature, they would be pleased to take up the invitation to nominate a representative to the Task Group. This would be Councillor Foster. RESOLVED: 1) That the Task Group concentrate its immediate efforts on the sections outlined above, and 2) That the Task Group meet on the following dates: 25 January, 4.00-6.00pm, Cross Room 17 February, 4.00-6.00pm, Cross Room 08 March, 4.00-6.00pm, Oaks Room. |
Agreed | ||
| 31 |
Governance Learning Hour Members were aware that a Learning Hour for all members on the role and purpose of the committee had originally been scheduled for early February. Whilst they acknowledged that such a session would be worthwhile, they agreed that it would be more appropriate later in the year when they had had an opportunity to reflect on what the committee had achieved. The chairman would be happy to lead the session, with presentations by officers. RESOLVED: That the chairman and officers work together to agree on timing, content and format of the Governance Learning Hour. |
Agreed | ||
| 32 |
Forward Plan Plan attached Members noted the current Forward Plan and agreed that the Revised Local Code of Governance should be deferred from the 17 February meeting to a date yet to be agreed. RESOLVED: That the Revised Local Code of Governance be deferred. |
Agreed | ||