Agenda and draft minutes
PDF 211 KBVenue: Surrey County Council, 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 - 20 NOVEMBER 2024
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. |
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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 (16 January 2025). 2. The deadline for public questions is seven days before the meeting (15 January 2025). 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: Key points raised in the discussion: 1. The Chairman noted that he would progress his actions: A20/24, A30/24, A40/24. 2. A Committee member sought an update on the ‘to be confirmed’ target dates for completion for several actions and for the tracker to be updated. A29/24: the Committee member added that it was meaningless if the Council did not respond to the actions highlighted by Internal Audit. The Deputy Chief Executive and Executive Director - Resources explained that a report on Tree Management would be presented at March’s Committee meeting. 3. A35/24: the Deputy Chief Executive and Executive Director - Resources noted that he had met with the Monitoring Officer and the Chief Executive and the Monitoring Officer would arrange that meeting with Committee members. 4. A42/24: the Deputy Chief Executive and Executive Director - Resources noted that he was liaising with the Monitoring Officer to ensure that Committee members’ comments on the Annual Governance Statement - Half Year Update are reflected, particularly concerning Unit 4/MySurrey.
RESOLVED: 1. Monitored progress on the implementation of actions/recommendations from previous meetings (Annex A). 2. Noted the work plan and the changes to it (Annex B).
Actions/further information to be provided: None.
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TREASURY MANAGEMENT STRATEGY STATEMENT 2025/26
This report sets out the Council’s Treasury Management Strategy for 2025/26, which is required to ensure compliance with the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice (the CIPFA Code).
Additional documents: Minutes: Speakers:
Nikki O’Connor, Strategic Finance Business Partner (Corporate) Andy Brown, Deputy Chief Executive and Executive Director - Resources Owen Jenkins, Executive Director - Highways, Infrastructure and Planning
Key points raised in the discussion: 1. The Strategic Finance Business Partner (Corporate) introduced the Treasury Management Strategy Statement (TMSS), which is produced as part of wider reaching Capital, Investment & Treasury Management Strategy as part of the budget planning process each year. She noted that the training session last week with Arlingclose covered the main elements of the TMSS and that there were no fundamental changes proposed to the TMSS compared to the current year strategy. 2. The Strategic Finance Business Partner (Corporate) noted that the Council’s borrowing requirement was set to continue to rise over the medium term, driven by the proposed Capital Programme which had been through multiple iterations and scrutinised. The Council would continue to avoid holding large cash balances and manage the cost of carry by optimising internal resources to reduce overall borrowing. The Council currently has a high proportion of its borrowing held as short-term borrowing, this was considered an appropriate strategy given the recent high interest rates experienced and a consensus that they would fall over the next twelve to eighteen months. It was likely that the Council would take out further long-term borrowing over the next year, although this would remain under review and would depend on cash flow forecasts and the prevailing rates of interest. 3. The Strategic Finance Business Partner (Corporate) noted that no changes were proposed to the Investment Strategy, the aim was to keep cash balances low and put liquidity and security considerations before yield achievable. Limits on the duration and amount of investments were set for each counterparty type. It was likely that the Council would continue to utilise Money Market Funds over the next year. 4. The Chairman noted that the Capital Programme could be subject to change due to local government reorganisation and asked whether there was scope for that. The Deputy Chief Executive and Executive Director - Resources noted that the Council should factor that in going forward, the Section 25 statement in the budget set out that local government reorganisation should not detract the Council from setting the budget and delivering the Capital Programme. 5. The Deputy Chief Executive and Executive Director - Resources clarified that as compared with previous reports, the Committee was being asked to comment on and note the TMSS, it was not being asked to approve the TMSS as the Cabinet would recommend it to the Council for its approval. 6. A Committee member asked what the actual balance sheet figures were of properties owned by the Council. The Strategic Finance Business Partner (Corporate) confirmed that the Property, Plant and Equipment (PPE) figure was £2.1 billion as at March 2024 and that included the countryside estate, highways, bridges, land and buildings. The Deputy Chief Executive and Executive Director - Resources clarified that many items on the balance sheet did not translate into cash. ... view the full minutes text for item 6/25 |
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STATEMENT OF ACCOUNTS 2023/24
To inform the Committee of the result of the external audit of the council’s 2023/24 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).
Note: Report to follow.
Additional documents: Minutes: Speakers:
Nikki O’Connor, Strategic Finance Business Partner (Corporate) Janet Dawson, Partner, EY
Key points raised in the discussion: 1. The Strategic Finance Business Partner (Corporate) noted that since the draft accounts were presented to the Committee in July 2024, her team had been working closely with EY to finalise the accounts. No significant or material changes were anticipated, EY anticipated that it would issue an unqualified opinion, residual matters to be delegated to the Section 151 Officer in consultation with the Chairman to sign off the accounts once completed. 2. The Partner (EY) noted that the work was almost complete, clearance of final queries on transaction level testing remained, the queries on PPE and investment property valuations were complete, the specialists were reviewing the updated valuation of the Eco Park and no concerns had been raised, and final review processes and clearance internally were to be completed. 3. Regarding the key findings, the Partner (EY) highlighted that: · In terms of the risk of material misstatement, for most of those areas of focus there were no further issues to raise with the Committee. · On pensions, there was an adjustment of £14.99 million in the valuation of one investment and the Council’s share was £6.75 million; the Council did not propose to make that adjustment. · Significant additional work had been undertaken on Private Finance Initiative (PFI). The waste PFI and Eco Park was reviewed and specialists were needed, the Council had renegotiated the contract and amendments were required. Work had concluded on the street lighting PFI and the Council was recommended to update its model in line with the current service capital and interest costs, more work needed to be done on the charges and liability. Work on the care home PFI had concluded and there were no other issues. · Some capital expenditure had been bulked together on the fixed asset register, EY had spoken to officers to tighten up that accounting approach, there was no material misstatement. · The data migration work to the new system had impacted the progress of the audit in terms of understanding the data mapping and breaking down data, that created significant additional work; the approach had adapted and there was sufficient assurance. · There were several prior period adjustments. · A recommendation was made to keep a view on the actual valuation of the Council’s investments in subsidiaries and making sure those were kept up to date and reflected market conditions and their future performance. · EY had a constructive relationship with the Finance team, both understood what needed to be done to help the Council improve. 4. The Chairman asked when the outstanding queries would be completed. The Partner (EY) explained that the team was working through finalising the files in line with quality standards over the next fortnight, she anticipated that sign off of the final accounts would likely happen in February and clarified that EY was confident that those final queries should not have any further material impact. 5. The Chairman asked what the Council’s response ... view the full minutes text for item 7/25 |
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This report provides the Audit & Governance Committee with the outcome and findings of the external audits of the 2023/24 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: Speakers:
Bill Harrow, Senior Finance Business Partner (Commercial)
Key points raised in the discussion: 1. The Senior Finance Business Partner (Commercial)explained that each auditor for the subsidiaries provided unqualified audit reports, to be consolidated into the Council’s accounts. For each entity, external audit found management had appropriate procedures in place to prevent an override of internal controls, there was no indication of management bias or significant transactions outside the normal course of business, revenue was recognised correctly and there were no issues in the recoverability of debtors. 2. A Committee member referred to the key audit findings regarding fixed assets additions, assets below £500 were being capitalised, the recommendation deemed the issue as not being resolved and he queried why. The Senior Finance Business Partner (Commercial) explained that concerned the Hendeca accounts, the Hendeca board and team had been advised not to capitalise those items going forward. That would be captured in the next audit and the items should go through the profit and loss account, not the balance sheet. 3. The Chairman noted all the unqualified opinions and no material misstatements.
RESOLVED:
The Audit and Governance Committee considered the contents of the 2023/24 Audit Reports for the entities referred to above. The Financial Statements for each company were shared as background information.
Actions/further information to be provided: None.
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UNIT 4/MYSURREY STABILISATION BOARD REPORT
To provide an overview of the work of the Stabilisation Board in addressing the issues with Unit4 / MySurrey. A summary of progress to date, key areas of activity, planned activity and the model which governs the work will be discussed.
Additional documents: Minutes: Speakers:
Liz Mills, Strategic Director - Customer Service Transformation Karen Telfer, Portfolio Lead - Unit 4 Stabilisation Programme Andy Brown, Deputy Chief Executive and Executive Director - Resources
Key points raised in the discussion: 1. The Strategic Director - Customer Service Transformation noted that the report provided an update on the work underway and on the progress made regarding the audit recommendations made over the last year. Good progress was demonstrated in line with the stabilisation plan, going forward at the end of March there would be a move from the stabilisation phase to an optimisation phase. 2. A Committee member highlighted that he had seen a version of the report prior to the Committee in his role as a Vice-Chairman of the Resources and Performance Select Committee. 3. A Committee member noted that it looked like most of the problems were resolved, she commended officers for their hard work. 4. The Chairman queried how things were progressing in response to the Internal Audit findings. The Portfolio Lead - Unit 4 Stabilisation Programme referred to the target completion dates set out in Annex 2 for the audit actions. A few Internal Audit reports had noted Substantial Assurance compared to the Partial Assurance received previously and number of other items had been completed, awaiting a follow-up audit. 5. A Committee member referred to the cover report which noted that there were no direct financial implications arising from the report, he asked whether the financial impact of the remediation activity had been quantified. The Strategic Director - Customer Service Transformation confirmed that over time, the Council had invested additional sums on remediation and to ensure that the teams were resourced to carry out that activity for example needing to have technical expertise. That cost was managed through in-year budget management, making efficiencies elsewhere, the optimisation phase looked to yield the benefits. 6. A Committee member referred to the 41 tickets outstanding with Unit 4 as of 17 December 2024 and three had been open for over a year, he asked whether the processes to deal with those were all listed in the annex. The Portfolio Lead - Unit 4 Stabilisation Programme explained that those were not necessarily listed in the annex, but were referred to in the report, for example there were twice weekly meetings with Unit 4 to review those items and monitor progress, and there were monthly meetings with Unit 4 to hold them to account. 7. The Strategic Director - Customer Service Transformation clarified that progress had been made on those three tickets, the Council was focused on strengthening accountability arrangements with the provider, of those three long-standing tickets there was now one ticket remaining. Regarding the 41 tickets, Unit 4 awaited broader upgrades of the system to resolve those, the Council was driving Unit 4 to provide updates and fixes as necessary in the meantime. 8. The Cabinet Member for Finance and Resources noted the huge amount of work underway on stabilisation and the strong governance in place, ... view the full minutes text for item 9/25 |
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AUDIT AND GOVERNANCE COMMITTEE - EFFECTIVENESS REVIEW 2024
For the Committee to review the outcome of the Committee Effectiveness Self-Assessment and agree actions and next steps.
Additional documents: Minutes: Speakers:
Andy Brown, Deputy Chief Executive and Executive Director - Resources
Key points raised in the discussion: 1. The Deputy Chief Executive and Executive Director - Resources noted that going forward the Committee should put the next steps into practice. 2. The Chairman welcomed the positive report.
RESOLVED:
The Committee reviewed the outcomes of the effectiveness self-assessment, based on the results from the following exercises:
- Self-assessment of good practice, and - Evaluating the impact and effectiveness of the audit committee.
Actions/further information to be provided: 1. A4/25 - The identified areas for improvement and suggested actions will be implemented by the Committee and officers, to be reported in a progress update.
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DATE OF NEXT MEETING
The next meeting of the Audit and Governance Committee will be on 12 March 2025. Additional documents: Minutes: The date of the next meeting of the Committee was noted as 12 March 2025.
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