Agenda and minutes
PDF 212 KBVenue: Surrey County Council, Committee Room, Woodhatch Place, 11 Cockshot Hill, Reigate, Surrey, RH2 8EF
Contact: Amelia Christopher Email: amelia.christopher@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
To receive any apologies for absence and substitutions. Additional documents: Minutes: There were none.
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MINUTES OF THE PREVIOUS MEETING - 22 NOVEMBER 2023
To agree the minutes as a true record of the meeting. Additional documents: Minutes: The Minutes were approved as an accurate record of the previous meeting.
The Chairman noted that a key agenda item discussed was the complaints handling procedure, Committee members raised several key points due to be reported on at January’s Committee; the item has now been deferred to March’s Committee.
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DECLARATIONS OF INTEREST
All Members present are required to declare, at this point in the meeting or as soon as possible thereafter (i) Any disclosable pecuniary interests and / or (ii) Other interests arising under the Code of Conduct in respect of any item(s) of business being considered at this meeting NOTES: · Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest · As well as an interest of the Member, this includes any interest, of which the Member is aware, that relates to the Member’s spouse or civil partner (or any person with whom the Member is living as a spouse or civil partner) · Members with a significant personal interest may participate in the discussion and vote on that matter unless that interest could be reasonably regarded as prejudicial. Additional documents: 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 (11 January 2024). 2. The deadline for public questions is seven days before the meeting (10 January 2024). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Additional documents: Minutes: There were none. |
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RECOMMENDATIONS TRACKER AND WORK PLAN
To review the Committee’s recommendations tracker and work plan. Additional documents: Minutes: Witnesses:
Amelia Christopher, Committee Manager Ade Oyerinde, Grant Thornton
Key points raised in the discussion:
1. The Chairman referred to Appendix 1 to the recommendations tracker, response to action A37/23 and noted the error in the table for 2022/23, third column second row which states that there are two Assistant Managers in the Adult Services Customer Relations Team; officers have clarified that there is only one. 2. A Committee member referred to action A7/23 where the last update was provided on 9 January 2024 that the Customer Relations Team Manager and the team are working on an update and asked whether that would be received in March as part of the item; the Committee Manager confirmed that was the case. 4. A Committee member referred to action A10/23 whereby the target date for completion was the next few months and asked for that to be more specific, regarding the link to be circulated to members as soon as it is set up. The Committee Manager would follow that up with officers. 5. A Committee member referred to the action A15/23 whereby the Value for Money assessment was nearing completion and would be included in the Audit Findings Report for 2022/23 to the Committee in January. The Chairman confirmed that was included under item 7. 6. A Committee member referred to action A16/23 whereby the target date for completion was to be confirmed and asked for that date to be more specific. Another Committee member noted that Grant Thornton was to provide an update at January’s Committee and asked for that update. The Grant Thornton representative noted that they were still waiting for Public Sector Audit Appointments (PSAA) to approve the proposed 2022/23 audit fee, that was done on a quarterly cycle. 7. The Grant Thornton representative referred to the work plan noting corrections on pages 34 (June) and 36 (November) that going forward the external auditors would not be Grant Thornton. The Committee Manager would make that change.
RESOLVED: 1. Monitored progress on the implementation of recommendations from previous meetings (Annex A). 2. Noted the work plan and the changes to it (Annex B).
Actions/further information to be provided:
1. A1/24 - The Committee Manager will provide to officers the letter/details of the complaint from the school in the ... view the full minutes text for item 5/24 |
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TREASURY MANAGEMENT STRATEGY STATEMENT 2024/25
This report sets out the Council’s Treasury Management Strategy for 2024/25, as required, to ensure compliance with the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2021 Edition (the CIPFA Code). Additional documents: Minutes: Witnesses:
Nikki O’Connor, Strategic Finance Business Partner (Corporate) Key points raised in the discussion:
1. The Chairman thanked the Strategic Finance Business Partner (Corporate) and officers for the useful training session on the Treasury Management Strategy (TMS) Statement last week. 2. The Strategic Finance Business Partner (Corporate) noted that the Committee was asked to approve the TMS Statement which formed Part 4 of the Capital, Investment and Treasury Strategy for 2024/25. The full document was to be scrutinised by the Resources and Performance Select Committee and would be considered by the Cabinet with a recommendation for Council to approve it in February as part of the 2024/25 Final Budget and Medium-Term Financial Strategy to 2028/29. 3. The Strategic Finance Business Partner (Corporate) explained that the TMS Statement outlined the Council’s approach to managing cash flows and related risks, specifically in respect of the Council’s borrowing strategy and the safeguarding of cash investments. The TMS Statement for 2024/25 continues the Council’s strategy to maximise internal borrowing and to balance the long-term and short-term debt portfolio to manage the ‘cost of carry’. The Minimum Revenue Provision Policy was in line with current guidance. The investment strategy was to keep cash investments low and to utilise Money Market Funds for short term investments, to ensure liquidity and security. 4. A Committee member referred to Annex 1, paragraph 2.25 on Environmental Sustainability and welcomed that expertise being brought in but asked where the information could be accessed on the reporting of carbon impacts of the Capital Programme, as that could impact the Council’s decision-making process around its investments. The Strategic Finance Business Partner (Corporate) explained that formed part of the work by the Greener Futures team around ensuring that the Council was moving towards that net zero target and would find out where that work is shared. 5. A Committee member referred to Annex 1, paragraphs 4.25 - 4.27 around the Local Context and asked how the Capital Financing Requirement (CFR) was used regarding balancing internal and external borrowing. The Strategic Finance Business Partner (Corporate) explained that the CFR was a measure of the Council’s underlying need to borrow in relation to the historic capital spend and forecast future capital spend funded from borrowing. It does not represent what the Council’s actual borrowing is or take into account any internal borrowing. Regarding actual borrowing, decisions were based on the TMS and the cash flow forecasts. Table 13 takes that CFR and looks at the Council’s ability to internally borrow - or use its short to medium term cash balances - and tries to maximise that to reduce the revenue cost of actual external borrowing. 6. The Chairman referred to table 13 mentioned above, querying whether the projected additional external borrowing requirement does not necessarily mean that the Council would be investing more heavily. The Strategic Finance Business Partner (Corporate) explained that the table demonstrates the Council’s ongoing commitment to capital expenditure, the Capital Programme - to be approved - remained ambitious and significant in ... view the full minutes text for item 6/24 |
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STATEMENT OF ACCOUNTS 2022/23
To inform the Committee of the result of the external audit of the council’s 2022/23 Statement of Accounts, to receive the external auditor’s Audit Findings Report and to approve the council’s letter of representation from the Council’s s151 Officer (Deputy Chief Executive & Executive Director of Resources). Additional documents: Minutes: Witnesses:
Barry Stratfull, Chief Accountant (Corporate) Ade Oyerinde, Grant Thornton Nikki O’Connor, Strategic Finance Business Partner (Corporate) Paul Dossett, Grant Thornton Key points raised in the discussion:
1. The Chief Accountant (Corporate) noted that the report included Grant Thornton’s Audit Findings Report. In respect of the Statement of Accounts 2022/23 there were a few last-minute audit checks and reviews being undertaken. It was expected that Grant Thornton would issue an unqualified opinion on both the Council and the Pension Fund accounts, to be signed in the next week or two. It was not expected that anything material would result from the final checks, if that did arise then the accounts would be brought back to the Committee. 2. The Grant Thornton representative noted that: · The work was substantially complete, the main outstanding areas were around the valuation of Property, Plant and Equipment (PPE) and investment properties; since the report was issued the work on investment properties was substantially complete, final queries were being addressed regarding the valuation of PPE. · To date, there were no material amendments to the Council accounts or Pension Fund accounts, it was anticipated that they would issue an unqualified opinion on both accounts in the next few weeks. Final work was underway on the Pension Fund accounts around the journals and testing on benefits paid. · The materiality was set out in the report. · There were no issues identified in respect of their independence as auditors. · The appendices set out the recommendations identified, the majority were IT related issues that had not resulted in the identification of any material errors. Most of the recommendations were assessed as low or medium and were being followed up, including those from last year’s accounts. · The audit adjustments were being worked through to ensure consistency with what had been audited and the agreed expected changes. · Once the audit is completed the estimated audit fee would be reviewed, to be approved by PSAA. 3. The Strategic Finance Business Partner (Corporate) clarified that the Committee’s approval was sought as it was expected that it was the last time the Committee would see the 2022/23 Statement of Accounts with final sign off to be provided by the Chairman and Section 151 Officer. Noted that the delay in completing the audit was due to several reasons and lessons learnt were being incorporated going forward, the delays to the previous year’s audit impacted this year’s audit and there were national issues affecting local authority audit sign offs in many authorities. Noted that if the accounts were to be signed off in the next few weeks, the Council would be one of only a handful of local authorities to do so to date. 4. A Committee member referred to Appendix B - Action Plan around the recommendations concerning the IT system and asked whether Grant Thornton had discovered cases where someone had breached the segregation of duties or had user access when they should not have; what was the cause of those issues, were they related to ... view the full minutes text for item 7/24 |
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EXTERNAL AUDIT: AUDITOR'S ANNUAL REPORT 2022/23
To inform the Committee of the result of Grant Thornton’s consideration of whether the Council has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.
Additional documents: Minutes: Item 9 was taken before item 8. Witnesses:
Paul Dossett, Grant Thornton Nikki O’Connor, Strategic Finance Business Partner (Corporate)
Key points raised in the discussion:
1. The Grant Thornton representative noted that under the National Audit Office (NAO) Code of Practice regulations they were required to provide a Value for Money (VfM) assessment which considered whether the arrangements were adequate to facilitate that. 2. The Grant Thornton representative noted that the three arrangements reviewed were: financial sustainability, governance, and improving economy, efficiency and effectiveness: · Financial sustainability was rated Amber, it was Red in many other local authorities with more Section 114 notices likely to be issued; Grant Thornton recognised the huge challenges ahead around the medium-term financial plan, but due to the Council’s understanding of the risks and willingness to take some difficult decisions the Council was in a lower risk category compared to others. · Governance included arrangements for risk management, internal audit and counter fraud; that was rated Amber as the Council was in a strong position with embedded arrangements. · Improving economy, efficiency and effectiveness contained two aspects: the work of external inspectors such as Ofsted, and internal arrangements and processes to ensure VfM, such as how the Council works in partnership with others. It was rated Green and was an outlier compared to many councils, the Council was in the top quartile. 3. A Committee member presumed that the recommendations relevant to the Committee were being factored into its work plan. She asked who the Council could be compared to in the top quartile. The Grant Thornton representative noted that Surrey’s position was strong, towards the top of the group compared to other counties in the area which had significant financial challenges such as: Kent, West and East Sussex, Essex, Hertfordshire, Hampshire. However, no council was more than a few bad decisions away from an issue particularly around financial sustainability and demand pressures in children’s services. The Committee member noted that was useful for Surrey to benchmark itself against. 4. The Chairman noted the hard work and in terms of Surrey ever achieving a Green rating for financial sustainability he noted that the Council would have to eliminate the risks around the budget gap which would be almost impossible with the financial challenges it faced. The Strategic Finance Business Partner (Corporate) was pleased with the report noting the hard work undertaken over several years to improve the Council’s financial sustainability and financial management arrangements and stressed that the challenging financial environment should not be underestimated. The Cabinet Member for Finance and Resources agreed with the comments made, he believed that the Council had both the processes and the governance in place to deal with those challenges ahead; the transformation programme would help address that. 5. A Committee member welcomed the report which was transparent containing a detailed level of information, he thanked Finance officers and Grant Thornton. 6. The Chairman thanked Grant Thornton for all their work over the years.
RESOLVED:
Noted the report and considered the improvement ... view the full minutes text for item 8/24 |
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This report provides the Audit & Governance Committee with the outcome and findings of the external audits of the 2022/23 financial statements of Hendeca Group Ltd, Surrey Choices Ltd, Halsey Garton Residential Ltd, Halsey Garton Property Ltd, and Surrey and Kent Commercial Services LLP (trading as Connect 2 Surrey).
Additional documents: Minutes: Witnesses:
Bill Harrow, Senior Finance Business Partner (Commercial) Key points raised in the discussion:
1. The Senior Finance Business Partner (Commercial) noted the unqualified audit opinions for the 2022/23 external audit reports of each subsidiary, the results were consolidated to the Council’s accounts. Findings included: management had appropriate procedures in place to prevent overrides of internal controls, found no indication of management bias or significant transactions outside the normal course of business, revenue was found to be recognised correctly across all the entities, no issues were found with the recoverability of debtors and reasonable assurance was obtained. 2. The Chairman welcomed the positive report for all the subsidiaries, there were no material misstatements. 3. A Committee member welcomed the collated report and useful pointers concerning the value of properties. He queried why the various subsidiaries used different external auditors. The Senior Finance Business Partner (Commercial) explained that each subsidiary decides who their external auditors were.
RESOLVED:
That the Committee considered the contents of the 2022/23 Audit Reports for the entities referred to in the report. The Financial Statements for each company were shared as background information. Actions/further information to be provided:
None.
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DATE OF NEXT MEETING
The next meeting of the Audit and Governance Committee will be on 13 March 2024. Additional documents: Minutes: The date of the next meeting of the Committee was noted as 13 March 2024.
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