Agenda and minutes
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Contact: Cheryl Hardman Email: cherylh@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Minutes: Apologies were received from Will Forster. |
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MINUTES OF THE PREVIOUS MEETING: 29 May 2014
To agree the minutes as a true record of the meeting. Minutes: The Minutes were agreed as an accurate record of the previous meeting. |
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DECLARATIONS OF INTEREST
To receive any declarations of disclosable pecuniary interests from Members in respect of any item to be considered at the meeting.
Notes: · In line with the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012, declarations may relate to the interest of the member, or the member’s spouse or civil partner, or a person with whom the member is living as husband or wife, or a person with whom the member is living as if they were civil partners and the member is aware they have the interest. · Members need only disclose interests not currently listed on the Register of Disclosable Pecuniary Interests. · Members must notify the Monitoring Officer of any interests disclosed at the meeting so they may be added to the Register. · Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest. Minutes: There were none. |
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QUESTIONS AND PETITIONS
To receive any questions or petitions.
Notes: 1. The deadline for Member’s questions is 12.00pm four working days before the meeting (25 July 2014). 2. The deadline for public questions is seven days before the meeting (24 July 2014). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Minutes: There were none. |
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RECOMMENDATIONS TRACKER
To review the Committee’s recommendations tracker.
Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Verity Royle, Senior Principal Accountant – Management Accounting
Key points raised during the discussion: 1. In relation to A35/13 (Council Tax collection rates), an update would be provided at the next meeting. 2. In relation to A9/14 (Officer Interests), the Vice-Chairman reported that he had reviewed the papers and the Chief Internal Auditor had done some further investigation and he was now satisfied that the process was effective. 3. In relation to A13/14 (Risk Register), the Senior Principal Accountant – Management Accounting said that this would be addressed under item 13. 4. In relation to A14/14 to A16/14 (Annual Governance Statement), the Chairman informed the committee that all the suggested amendments had been made.
Actions/Further information to be provided: The recommendations tracker to be updated to reflect the discussion, as noted above.
RESOLVED: That the recommendations tracker was noted and the committee agreed to remove the completed actions.
Committee Next Steps: None.
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COMPLETED INTERNAL AUDIT REPORTS
The purpose of this report is to inform Members of the Internal Audit reports that have been completed since the last meeting of this Committee in May 2014. Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Sue Lewry-Jones, Chief Internal Auditor
Key points raised during the discussion: 1. The Chief Internal Auditor introduced the report. She highlighted that four audits had reached an audit opinion of effective. The audit of Surrey Arts had found that significant improvement was needed and that the Communities Select Committee would be looking at this in September. 2. A Member queried how much money was involved in the audit of Surrey Arts. The Chief Internal Auditor confirmed that in financial terms this was not a big area. Musical instrument hire brings in £31,000 per year. Surrey Arts had recently moved to a new site, partly to generate more income. The service had asked for an audit to help it indentify where to make improvements. 3. There was concern amongst Members that coordination and management support of Operation Horizon was not working well. The Chairman highlighted that Operation Horizon had replaced more roads during the year than the target 100km. He also pointed out that the cost was 55% more than had been budgeted. He did not feel that the reasons for this had been fully explained. The Chairman agreed to write a letter to the portfolio holder raising these concerns (Recommendations tracker ref: R4/14). 4. Members suggested that more clarity was required on who was undertaking what work on the Highways. The Chief Internal Auditor stated that the permit scheme was included in the Audit Plan this year and this report may address Members’ concerns. 5. Officers informed the committee that residents in care homes were not consulted during the audit of Accounts Receivable. This was a review of central processes. 6. The Chairman queried the finding of Internal Audit that some improvement was needed on Capital Expenditure Monitoring and whether this finding differs from Grant Thornton amber finding in its Value for Money report. The Chief Internal Auditor felt that the findings were similar. The Deputy Chief Finance Officer suggested that amber is in line with ‘some improvement needed’. 7. Members were concerned that the SEN Strategy had not been updated since 2012. The Chief Internal Auditor stressed that the audit opinion was that there had been some improvement to funding for residential provision. The SEN Strategy was a wider matter. Members queried why a consultant was necessary to undertake the remodelling of the Council’s residential (maintained) school provision and when this work would be complete. The Chairman agreed to write a letter to the portfolio holder addressing these issues (Recommendations tracker ref: R5/14).
Actions/Further information to be provided: i. The Chairman to write to the Cabinet Member for Highways, Transport and Flooding Recovery with regard to concerns about Operation Horizon. ii. The Chairman to write to the Cabinet Member for Schools and Learning with regard to the SEN Strategy.
RESOLVED: That the committee notes the report.
Committee Next Steps: None. |
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The Committee has requested a progress report with particular emphasis on the proportion of payments made by direct debit.
Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Paul Carey-Kent, Strategic Finance Manager – Adult Social Care, Public Health & Fire Toni Carney, Benefits & Charging Consultancy Team Manager Jackie Knutton, Order to Cash Process Owner
Reem Burton, Lead Auditor Sue Lewry-Jones, Chief Internal Auditor
Keith Witham, the Chairman of Adult Social Care Select Committee, had been invited to attend the meeting for this item. He was unable to attend but had sent his comments which were tabled and are attached as Annex A to the Minutes.
Key points raised during the discussion: 1. The Strategic Finance Manager introduced the report and highlighted the regular monitoring of social care debt levels by the Adult Social Care Select Committee. 2. Members expressed concern about the stalled improvement of the proportion of payments for social care collected by direct debit over the past couple of years. The Strategic Finance Manager explained that a lot of work was underway to raise the proportion, including the survey to understand why some clients do not want to use direct debit. The main issue was clients’ desire for full control of their payment timings. 3. Officers were asked if giving alternative dates to pay for social care had been considered if income streams did not match up with the current dates. The Order to Cash Process Owner agreed that an alternative date could be considered. At present, the date is set at the 21st of the month. This allows for ten days notice of the direct debit and ensures that non-payments are recorded to roll into the next cycle. Another Member argued against this suggestion, highlighting that the Council is providing a service and should be able to be tougher about collecting payments. At present, the Council is spending too much time acting as a credit controller. The Strategic Finance Manager explained that the Council is not a commercial supplier and has a responsibility to provide social care even if the individual has not set up a direct debit. The committee agreed to request that the service to consider a second date to pay social care within the month (Recommendations tracker ref: A18/14). 4. A Member pointed out that, according to the Chairman of Adult Social Care Select Committee, levels of debt at Surrey County Council were not excessive compared to other local authorities. The Chairman identified that two local authorities had a higher proportion of service users paying by direct debit than Surrey. He asked that the service contact them to find out if any lessons could be learnt (Recommendations tracker ref: A19/14). 5. The Chairman asked about why service users are only given information about costs once they have already started receiving a service. This brings them into debt from the start. The Strategic Finance Manager agrees that this does cause difficulties and that the Rapid Improvement Event had addressed this issue. The Benefits & Charging Consultancy Team Manager explained that it was not always possible to financially assess a person before they ... view the full minutes text for item 111/14 |
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STATEMENT OF ACCOUNTS 2013/14
To inform the Committee of the result of the external audit of the council’s 2013/14 Statement of Accounts, to receive the external auditor’s Audit Findings Report and to approve the council’s letter of representation from the Director of Finance.
Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Nikki O’Connor, Finance Manager – Assets & Accounting Sheila Little, Director of Finance
Andy Mack, Engagement Lead – Grant Thornton Kathryn Sharp, Senior Manager – Grant Thornton Guy Clifton, National Value for Money Lead – Grant Thornton
Key points raised during the discussion: 1. The Finance Manager – Assets & Accounting introduced the report and highlighted that it was the earliest that audited reports had been brought to committee. A final review had been undertaken by the Grant Thornton technical team in the past 12 hours which had led to a number of changes. The amended pages were tabled and are attached as Annex B to these Minutes. The amendments did not change the outturn position of the Authority or the bottom line of any of the primary statements. 2. The amendments were explained to the committee. Two additional notes had been agreed relating to the Cash Flow Statement – Notes 40 and 41, these provided additional details on material items contained within the cash flow statement. In addition, changes had been made to the cash flow statement itself in relation to the collection fund adjustment. This was a late change to the accounts due to delays in the receipt of business rate figures from the borough and district councils. This adjustment had been incorrectly omitted from the version of the cash flow statement distributed to members previously. Note 12 had been restated to show the write-off of Academy Schools as impairment rather than de-recognition. 3. The original Note 38 had tried to restate the 2012/13 position according to the new version of IAS19. It had been decided to remove the restated figures and not to try to make them comparable to the 2013/14 figures. 4. Members queried whether it would be helpful to add a Note explaining that the Council is paying interest on Academy moneys that it no longer owns. The Finance Manager – Assets & Accounting agreed that there was an ongoing cost to the council of borrowing for capital expenditure on academy buildings but that this borrowing could not be separately identified as capital borrowing for specific schemes does not occur. Borrowing is done in line with the Treasury Strategy. This approach was not unique to Surrey County Council and occurs across local government. 5. Members asked if the delay in certification of completion of the audit would prevent the accounts from being signed off following the meeting. The Grant Thornton Engagement Lead explained that there were two stages to closing an audit. Firstly, the approval of the accounts, then the certification of completion of the Audit. It was common practice to wait for September when the assurance statement in respect of the authority’s Whole of Government Accounts consolidation pack is issued. 6. The term ‘componentisation’ was queried. The Finance Manager – Assets & Accounting explained that land was not depreciated at all. A material item within a building would be depreciated at a different rate to the property itself. Separate components within our asset ... view the full minutes text for item 112/14 |
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SURREY PENSION FUND ACCOUNTS 2013/14 AND GRANT THORNTON EXTERNAL AUDIT FINDINGS REPORT
This report presents the audited financial statements of the Pension Fund for the year ended 31 March 2014, in light of the County Council’s obligations as the administering authority under the Local Government Pension Scheme (LGPS) Regulations.
The external auditor (Grant Thornton) has issued an unqualified opinion on the accounts and this will be outlined in the Grant Thornton External Audit Findings for Surrey Pension Fund Report.
Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Phil Triggs, Strategic Manager – Pensions & Treasury Alex Moylan, Senior Accountant Sheila Little, Director of Finance
Andy Mack, Engagement Lead – Grant Thornton Kathryn Sharp, Senior Manager – Grant Thornton Guy Clifton, National Value for Money Lead – Grant Thornton
Key points raised during the discussion: 1. The Strategic Manager – Pensions & Treasury introduced the report. 2. The Strategic Manager – Pensions & Treasury agreed that the cross-reference to Note 24 under Note 4 should be to Note 25. This would be amended. 3. A Member pointed out that IAS 19 refers only to local authority accounts and not to the pension fund accounts. He suggested that the reference be removed or changed.
Actions/Further information to be provided: None.
RESOLVED: i. That the Committee APPROVES the 2013/14 Pension Fund financial statements as attached in Annex A to the report. ii. That the Committee NOTES the content of the External Audit Findings for Surrey Pension Fund Report as attached in Annex C to the report. iii. That the Committee identified no issues that need to referred to Cabinet in relation to the external auditor’s conclusions and recommendations. iv. That the Committee AUTHORISES the Director of Finance to sign the representation letter, as set out in Annex D to the report, on the authority’s behalf.
Committee Next Steps: None.
The committee then returned to Item 8: Statement of Accounts 2013/14 to consider the recommendations.
RESOLVED: i. That the Committee APPROVES the 2013/14 Statement of Accounts as attached in Annex A to the report, subject to authorising the Director of Finance in consultation with the Chairman of the Audit & Governance Committee to make further minor amendments, for publication on the council’s website and in a limited number of hard copies. ii. That the Committee NOTES the contents of the 2013/14 Audit Findings Report as attached in Annex C to the report. iii. That the Committee APPROVES the officer response to recommendations of the external auditor. iv. That the Committee NOTES the Director of Finance’s letter of representation, as set out in Annex C to the report. v. That the Committee identified no issues in the Audit Findings Report that should be referred to Cabinet.
Committee Next Steps: None.
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EXTERNAL AUDIT REPORT ON VALUE FOR MONEY FOR SURREY COUNTY COUNCIL
The purpose of this report is to inform the Committee of the results of the external auditor’s review of the Council’s arrangements for securing financial resilience. Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Guy Clifton, National Value for Money Lead – Grant Thornton
Key points raised during the discussion: 1. Grant Thornton’s National Value for Money Lead introduced the report and highlighted the amber findings for one aspect of financial control. This was an impressive result with only one area rated amber and 39 areas rated as green. He informed the committee that Grant Thornton’s national report on value for money would be published after the completion of value for money reports for all the local authorities audited by the company. 2. The committee debated the finding of amber as a result of issues resulting from the capital programme position. Members argued that it is very difficult to avoid re-profiling capital expenditure over the medium to long-term. Grant Thornton was asked whether many of the local authority clients had achieved green in this area. The National Value for Money Lead stated that in his view the finding was fair. A national approach to moderation of the RAG rating system was employed to ensure consistency across all clients. It was suggested that the potential for slippage could be reflected in capital profiling. He could not advise on the findings for other local authorities yet as Surrey had followed a faster timetable this year but that the timetable for completion of other reports is the end of September 2014.
At this point the Chief Executive arrived for Item 12: Annual Report of Surrey County Council. The Chairman suggested that Item 12 be taken at this point. The committee would then return to Item 10.
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ANNUAL REPORT OF SURREY COUNTY COUNCIL
To formally consider the Annual Report for the authority.
Additional documents: Minutes: Declarations of Interest: None.
Witnesses: David McNulty, Chief Executive
Sheila Little, Director of Finance Verity Royle, Senior Principal Accountant – Management Accounting
Key points raised during the discussion: 1. The Senior Principal Accountant introduced the report. She explained that it was very different to the previous year. An extensive exercise had been undertaken to look at what other corporate bodies for their Annual Report and to produce an Integrated Report. The intention had been to sign off the report following the meeting but this cannot happen until the Accounts are signed off. 2. The Chief Executive gave the Leader of the Council’s apologies for not being in attendance as he had been called away. He thanked officers for their work on the report. 3. Members agreed that the Annual Report was a vast improvement from the previous versions. 4. It was suggested that the table showing senior officers by salary band on page 493 of the committee papers bears little resemblance to the table in the Statement of Accounts. The Senior Principal Accountant explained that there are two different requirements regarding this disclosure: the Transparency Code and the CIPFA Code of Practice. A note is included on page 494 of the committee papers. It was suggested that Table 11 be re-titled to show these are current Members. 5. It was pointed out that the Member allowances table on page 495 of the committee papers only included existing Members and not those who had stood down at the 2014 elections and received some payment before they left. The table therefore implies that existing Members have had a sharp increase in allowances. The Senior Principal Accountant explained that a large number of Members had stood down at the last election. Including them all would have distorted the figures and made the list extremely long. 6. Members asked how the information in the report would be publicised. The Chief Executive responded that a good communications strategy was in place and that we are engaging with residents using different mechanisms. Residents are encouraged to access information online. 7. It was suggested that the Fairer Funding message was getting repetitive and would turn residents off. The Chief Executive explained that that the Leader is focussed on the way that Surrey is funded. This includes public sector partners such as Health and the Police. Historical methods of funding do not reflect the reality of life in Surrey. It would be remiss of the Council not to draw attention to this. While services are becoming more efficient and unit costs are going down, demand is increasing and grant levels are falling. The Chairman suggested that facts and figures from this report could be supplied to Surrey MPs. The Chief Executive agreed that we need to keep reminding the Surrey MPs that the current funding mechanisms put Surrey at a significant disadvantage. He also stressed that without proper investment in Surrey, it was difficult for the county to play its part in the economic recovery. The Chairman ... view the full minutes text for item 115/14 |
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TREASURY MANAGEMENT OUTTURN REPORT 2013/14
This report summarises the council’s treasury management activity during 2013/14, as required to ensure compliance with CIPFA’s Code of Practice for Treasury Management. The report also covers the council’s Prudential Indicators for 2013/14, in accordance with the requirements of the CIPFA Prudential Code for Capital Finance in Local Authorities. Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Phil Triggs, Strategic Manager – Pensions & Treasury Alex Moylan, Senior Accountant Sheila Little, Director of Finance
Key points raised during the discussion: 1. The Strategic Manager – Pensions & Treasury introduced the report. 2. In response to a query, the Strategic Manager – Pensions & Treasury stated that the council had a long-term relationship with Capita as its treasury management advisor. The contract is up for review shortly. There are not many alternatives in the market but they would be looked at in the short-term. 3. The Strategic Manager – Pensions & Treasury informed the committee that the recent loss of the UK’s AAA credit rating had not had significant impact UK Gilt yields and therefore little impact on the rates of interest that the council would pay for new Public Works Loans Board debt. 4. The Director of Finance informed the committee that given predictions for the financial climate over the next year, the Cabinet would be holding an informal workshop to broadly steer treasury management strategies early on in the budget-setting process.
Tim Hall left at 4.28pm.
Actions/Further information to be provided: None.
RESOLVED: i. That the committee NOTES the content of the Treasury Management Annual Report for 2013/14; and ii. That the committee ADOPTS the revised Treasury Management Risk Register.
Committee Next Steps: None.
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LEADERSHIP RISK REGISTER
The purpose of this report is to present the latest Leadership Risk Register and update the committee on any changes made since the last meeting. Additional documents: Minutes: Declarations of Interest: None.
Witnesses: Verity Royle, Senior Principal Accountant – Management Accounting
Key points raised during the discussion:
1.
The Senior Principal Accountant confirmed that there had been few
changes to the Leadership Risk Register from the previous
meeting. Actions/Further information to be provided: None.
RESOLVED: i. That the committee NOTES the content of the Leadership Risk Register; and ii. That the committee identified no matters to draw to the attention of others.
Committee Next Steps: None.
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