Agenda and minutes

No apologies were received.

(5.34 pm)

Member to advise of any declarations of interest.

No declarations of interest were made at the meeting.

(5.34 pm)

Of the meeting of 14 September 2020.

The Minutes of the meeting of the Committee held on 14 September 2020 were approved as a correct record.

(Three Members voted for the motion and there were two abstentions.)

(5.35 pm – 5.36 pm)

To determine whether to exclude the press and public during the consideration of any exempt information items – item 10 (part).

Appendix A to the report considered at Minute 26/20 was considered to be exempt by virtue of paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972.  Discussion on the item took place in open session.

(5.36 pm)

To consider any questions under Standing Order 27.

There were no public questions to consider under Standing Order 27.

(5.37 pm)

The Financial Services Manager to submit a written report.

The Financial Services Manager (FSM) submitted a written report, the Treasury Management Strategy Statement and Annual Investment Strategy - Mid-Year Review 2020/21. The Treasury Management Statement and Annual Strategy had been approved by Council on 4 March 2020.  Receiving the mid-year review report ensured compliance with the Council’s financial regulations and the Chartered Institute for Public Finance and Accountancy codes of practice.

The report contained an economic overview and updated information relating to capital expenditure and financing, including borrowing. It was confirmed that there was no planned external borrowing in 2020/21. The FSM asked Members to note that the Public Works Loan Board (PWLB) consultation referred to in paragraph 7.18 of the report had been completed. This had resulted in the rate of borrowing, for general fund borrowing, being reduced by one per cent. However, the PWLB would no longer lend to any authority that planned to buy investment assets primarily for yield anywhere in their capital plans, regardless of whether there were additional sources of finance other than the PWLB.

The average yield for cash investments was around 0.4% which was low but reasonable given the Bank of England base rate. The Bank of England rate had remained unchanged since March 2020 at 0.1% and advisors were forecasting this would remain unchanged until 2023. This low rate could be beneficial in terms of any external borrowing but would result in smaller income returns. Property fund returns were around 3.5% for the first half of the year. The FSM concluded by stating that there was some uncertainty around performance for the remainder of the year and overall there was an anticipated shortfall of investment income of around £150k, due to the impact of COVID-19 on the economy.

RECOMMENDED (UNANIMOUSLY):

That the Committee note the content of the report.

(5.37 pm – 5.43 pm)

The Senior Manager (Mazars) to submit a written report.

The Chair welcomed Diane Harold the Senior Manager of Mazars LLP, the Council’s external auditor, to the meeting to present the Audit Completion Report for the year ended 31 March 2020, for consideration by the Audit and Governance Committee. An executive summary on pages 3 and 4 of the report outlined the purpose and principal conclusions as well as the status of work and other key information.

Ms Harold began by explaining that, as with previous years the main elements of work were issuing an unqualified opinion on the Council’s financial statement and an unqualified value for money statement. The global COVID-19 pandemic had meant there had been revised timescales for the audit of the financial statement in 2020 and it would be further delayed. This was due to some outstanding areas of work. The Audit and Governance Committee would therefore be asked to consider an updated version of the report at a future meeting. Ms Harold stated that Mazars were grateful for the continued support from Council officers and that all parties had been working well together in challenging circumstances. Mazars would update the Committee with a full schedule of amendments when the final report was considered.

Ms Harold explained that the outstanding work related to assurances around the pension fund and property valuations. The firm had commissioned their own expert’s review of the valuations of Harrogate Convention Centre and Victoria Shopping Centre. Clarification was sought around an unadjusted misstatement that had been identified within the report, it was confirmed that the amount (£365k) was well below the materiality level and the work required to amend this would outweigh the benefits.

The Committee were recommended to note the contents of the version of the report before them, ahead of consideration of the final version.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(5.43 pm – 5.53 pm)

(D)

The Financial Services Manager to submit a written report.

The Financial Services Manager (FSM) submitted a written report in relation to the Council’s statutory audited Statement of Accounts for the year ended 31 March 2020 for approval.

Approval of the Audited Statement of Accounts was considered each year with the Audit Completion Report for the year from the Council’s external auditors and the Annual Governance Statement. The deadline for submitting these documents was extended in 2020 to the 30 November due to the COVID-19 pandemic. However, and as discussed at Minute 24/20, there were some outstanding matters in relation to the Audit Completion Report. The Committee were therefore asked to note the report before them, ahead of consideration of the final Audited Statement of Accounts 2019/20 at a future meeting.

The FSM explained that the delay would not incur any penalty, many authorities were in a similar position and the delay was not due to any serious issues. It was reported that, work that was outstanding was in the final stages and nearing completion. He referred to a meeting of the Committee held on 14 September where the unaudited Statement of Accounts for the year ended 31 March 2020 had been presented.

The FSM responded to comments about the wording of the report, and confirmed that the wording could be amended in the narrative section to ensure the information was communicated in a way that was easy to understand.

On behalf of the Committee the Chair thanked the officer team and external auditors for their work and efforts in challenging circumstances.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report and appendix.

(5.53 pm – 5.59 pm)

The Audit Services and Fraud Manager to submit a written report.

The Audit Services and Fraud Manager (ASFM) submitted a written report which provided an overview of the current audit recommendation position. The appendices provided details of outstanding priority one internal audit recommendations, recommendation movements and a summary of outstanding internal audit recommendations. Exempt Appendix A provided details of outstanding priority one internal audit recommendations. The ASFM confirmed that there was an update to this appendix which she would circulate to Members.

The ASFM explained that although there had been an impact on follow-up work due to the COVID-19 pandemic, it was continuing to take place. Appendix B, showed recommendation movements and it was highlighted that many recommendations had been implemented.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report.

(6.05 pm - 6.13 pm)

(D)

The Audit Services and Fraud Manager to submit a written report.

The Audit Services and Fraud Manager (ASFM) submitted a written report which provided an overview of the current audit recommendation position. The appendices provided details of outstanding priority one internal audit recommendations, recommendation movements and a summary of outstanding internal audit recommendations. Exempt Appendix A provided details of outstanding priority one internal audit recommendations. The ASFM confirmed that there was an update to this appendix which she would circulate to Members.

The ASFM explained that although there had been an impact on follow-up work due to the COVID-19 pandemic, it was continuing to take place. Appendix B, showed recommendation movements and it was highlighted that many recommendations had been implemented.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report and appendices.

(6.13 pm – 6.18 pm)

(D)

The Scrutiny, Governance and Risk Manager to submit a written report.

The Scrutiny, Governance and Risk Manager (SGRM) submitted a report with the Annual Governance Statement (AGS) for 2019/20 appended. The Accounts and Audit (England) Regulations 2015 require all relevant bodies to produce an AGS to append to their Statement of Accounts. The Committee would therefore be asked to consider the final version of the AGS alongside the Statement of Accounts at a future meeting.

The AGS provided details of the significant governance issues identified for the 2019/20 year; there was also a governance improvement action plan included and progress against this would be monitored and reported on to the Committee. It was confirmed that due to the extended timescales the AGS would be updated to include additional information, this was likely to include the Public Sector Internal Audit Standards external assessment outcome.

In response to a question about the number of customer complaints in 2019/20, the SGRM confirmed that the main areas where complaints were made had been identified and the increase had been noted. Monitoring of customer complaints had therefore been included on the improvement action plan.

RESOLVED (UNANIMOUSLY):

That the Committee note the content of the report and appendix.

(5.59 pm – 6.05 pm)

(D)