Agenda and minutes

Apologies for absence were received from Stephen Ross (Independent co-opted member).

David Ewart (as Chair) also took the opportunity to welcome Councillors Benea and Molloy as newly appointed members of the Committee for 2024-25.

Members are invited to declare at this stage of the meeting, the nature and existence of any relevant disclosable pecuniary or personal interests in the items on this agenda and to specify the item(s) to which they relate.

David Ewart (Chair) declared a personal interest as a member of CIPFA.

No other declarations of interest was made by members during the meeting.

To receive any deputations requested by members of the public in accordance with Standing Order 67.

There were no deputations considered at the meeting.

4.1   To approve the minutes of the previous meeting held on Thursday 28 March 2024 as a correct record.

        (Agenda republished on 10 June 2024 to include the final minutes)

4.2   To note the updated log of actions arising from previous meetings of the Committee.

RESOLVED that the minutes of the previous meeting held on Thursday 28 March 2024 be approved as a correct record, subject to:

·         Correction of the spelling “organisation” in bullet point two under the comments section within Minute.8: Review of Member Development Programme & Member Expenses.

Members noted the updates provided in relation to the following items listed on the Action Log:

·         Performance & Governance i4B & FWH – Members were advised that as a result of the General Election consideration of the scrutiny & audit role in relation to i4B & FWH Housing Ltd had been delayed with the arrangements and need for a Joint Scrutiny meeting to be reviewed following completion of the scrutiny work programme planning sessions schedule in July 2024.  It was noted that a further update on progress would be provided at the July 2024 Committee meeting. (Minesh Patel)

·         External Audit Progress and Plan 23-24: Members noted the update provided by Sophia Brown (External Auditor - Grant Thornton) on the final response to the regional Bus Lane camera objection to the Statement of Accounts, which had now been issued with no further appeal received.  As a result, it was agreed that the issue be removed from the Committee Action Log.

·         Evaluating Effectiveness of ASAC – Members were advised that Grant Thornton had agreed to provide an additional briefing session on the role External Audit, which would be included within the Committee Development Programme for 2024-25 (Sophia Brown – Grant Thornton)

To consider any matters arising from the minutes of the previous meeting.

None.

The purpose of this report is to update the Audit and Standards Advisory Committee on gifts and hospitality registered by Members during Q4 2023-24 and on member training.

Debra Norman, Corporate Director of Law & Governance, introduced a report updating the Audit and Standards Advisory Committee on gifts and hospitality registered by Members during Q4 2023-24 and Member Learning & Development activity.

The Committee noted the following key points:

·             The update on Gifts and Hospitality registered by members in the fourth quarter of 2023-24, as detailed in Appendix A of the report.

·             In relation to member attendance at mandatory training sessions, the Committee was advised that all members had completed their core mandatory refresher training.

The Committee was then invited to raise any comments/issues on the update provided, which are summarised below:

·             Confirmation was provided that the cycle of mandatory training had commenced again for the 2024-25 Municipal Year, on which further updates would continue to be provided for the Committee.

·             In relation to Gifts & Hospitality, the Committee was advised no limit had been set for the maximum amount of any gift or hospitality that individual members were permitted to receive.  It would therefore be a matter of judgement for each member to consider, with the formal requirement to register any gifts or hospitality received in an official capacity being for an estimated value of at least £50 (including any series of individual gifts and hospitality received from the same person totalling £50 or above over the course of a Municipal Year).

As no further issues were raised the Chair thanked Debra Norman for the update provided and it was RESOLVED to note the content of the report.

This report presents the Council’s Annual Counter Fraud Report for the financial year 2023-24.

Darren Armstrong, Deputy Director Organisational Assurance & Resilience, introduced a report presenting the Council’s Annual Counter Fraud Report for 2023-24, which summarised the counter fraud activity undertaken across multiple fraud types (including internal fraud, housing tenancy fraud, external fraud and proactive work) and had been designed to support the Committee in obtaining assurance on the robustness of the Council’s counter fraud arrangements.

In considering the report the following key issues were noted:

·                The high priority identified in terms of counter fraud activity given the inherent and significant level of risk posed by fraud to the Council, with the Council having established a well developed approach towards tackling fraud and corruption based on a combination of reactive and proactive prevention and detection activities in line with best practice.

·                The Annual Counter Fraud Plan had been designed to ensure that resources were being effectively targeted and deployed to prevent and detect fraud, underpinned by the Council’s Anti-Fraud and Bribery & Whistleblowing policies.  A summary of all reactive and proactive counter fraud activity undertaken in 2023-24 had been detailed within the Annual Counter Fraud Report attached as Appendix 1 to the report.

·                The amended format introduction as part of the Annual Counter Fraud Report, which included the following specific sections:

o      Internal Fraud Activity & Outcomes – including a breakdown of the main types and volume of referrals (including whistleblowing).  Members were advised that of the 20 cases concluded during the reporting period 10 had resulted in a degree of fraud and/or irregularity being identified involving either theft, misappropriation of funds; conflicts of interest; recruitment; external offences/breaches and/or conduct of staff.

o      Tenancy & Housing Fraud – with the total number of fraudulent housing cases concluded over the reporting period being 16 and total notional value (based on an estimate of £42k per property recovered or Housing application stopped) being £672k.

o      External Fraud – including (but not limited to) cases involving Blue Badges, Direct Payments, Council Tax and Business Rates, Insurance, Finance, Concessionary Travel and grant applications with 300 cases opened during the reporting period compared to 224 for the previous year.  Members were advised this included 213 successful outcomes where fraud was detected relating to Blue Badge, representing a significant increase compared to the previous year with 38 prosecutions and 126 cautions/warnings issued, again representing an increase over the previous year.

o      Proactive and other activity – including a broad range of work including National Fraud Initiative (NFI) data matching reviews, fraud workshops, targeted operations and other planned fraud risk reviews which had resulted in significant cost savings being generated for example, through the NFI Council Tax Single Person Discount (SPD) review and participation in the NFI London FraudHub.

·                The outline of the Counter Fraud Plan, which had also been included as Appendix 2 of the report, which summarised how resources would be deployed and targeted to achieve the aims and objectives within the Council’s anti-fraud policies developed based on previous outcomes, stakeholder engagement, known and emerging risks.  Members were advised this also included  ...  view the full minutes text for item 7.

This report summarises the activity of Internal Audit for the financial year 2023-24, including an update on work completed since the previous report in December 2023.  In addition, the report sets out the Annual Internal Audit opinion, provided by the Deputy Director Organisational Assurance and Resilience (as the Head of Internal Audit), on the adequacy and effectiveness of the Council’s framework for governance, risk management and control, which is used to support the Council’s Annual Governance Statement and presents revised Internal Audit Charter, reflecting the recent change in the role of the Head of Internal Audit.

Darren Armstrong (Deputy Director Organisational Assurance and Resilience) introduced the report which outlined the activity undertaken by Internal Audit during 2023-24 (and work undertaken since the previous update in December 2023) and included the Annual Audit opinion provided by the Deputy Director Organisational Assurance and Resilience (as Head of Internal Audit) on the adequacy and effectiveness of the Council’s framework for governance, risk management and internal control used to support the Annual Governance Statement.

Members were advised the report also presented the revised Internal Audit Charter, which had been amended to reflect the change in role of the Head of Internal Audit, with the Chair advising he would therefore consider each section of the report as separate items, prior to summarising the overall outcome.

In considering the Internal Audit Annual Report (as detailed within Appendix 1 of the report) the Committee noted the following key points:

·                There had been no actual or perceived threats to the independence and objectivity of the Internal Audit function in relation to the work carried out to deliver the 2023-24 internal audit plan. The Head of Internal Audit and all internal auditors had continued to receive unrestricted access to senior management, officers and all information and records necessary to undertake their work.  This was supported by the internal audit function having also received an External Quality Assessment (EQA) during 2022-23, which identified no concerns regarding to the independence or objectivity of the function.

·                The summary relating to delivery of the internal audit plan during 2023-24 contained within section 3 and Appendix A of the Annual Report;

·                The flexible and risk-based approach adopted towards development and delivery of the Annual Internal Audit Plan, with the summary of risk issues identified during 2023-24 and comparison with 2021-22 and 2022-23 provided in section 4 and Appendix B of the Annual Report.

·                The outline of Follow Up activity undertaken during 2023-24 in relation to previous audit reviews as detailed within section 5 and Appendix C of the Annual Report.  The Annual Report also included an outline of actions partially or still to be implemented along with the process of management engagement on these, as detailed within Appendix D of the Annual Report.

·                As detailed within section 6 of the Annual Report, the Head of Internal Audit had been satisfied that the work undertaken by Internal Audit during 2023-24, as well as wider governance arrangements, had enabled a “reasonable assurance” audit opinion to be provided on the Council’s control framework, risk management and governance arrangements.  In determining the annual opinion, the Head of Internal Audit had considered which key themes from audit work undertaken in 2023-24 could be enhanced in the future to better support the Council’s governance, risk management and internal control frameworks. The areas of improvement identified as a result had been detailed within section 6.17 – 6.24 of the Annual Report and included:

o      The rate of implementation of audit recommendations/actions within original timescales; and

o      The need to continue addressing “second line” gaps in control identified  ...  view the full minutes text for item 8.

This report details the final response provided by the Council to the external auditors Enquiries of Management in order to meet expectations of the Financial Reporting Council (FRC).

Members are asked to note that the report has been resubmitted for consideration following initial review at the previous meeting in March 2024.

Ben Ainsworth (Head of Finance) introduced a report providing the Audit & Standards Advisory Committee with an update and final opportunity to review the responses provided by management to the External Auditors Enquiries of Management 2023-24, in order to comply with the expectations of the Financial Reporting Council (FRC).  Members were advised that the Enquiries of Management related to those charged with governance for both the Council and also Council’s Pension Fund with the management responses detailed in Appendix 1 (Brent Council Enquiries of Management) and Appendix 2 (Pensions Fund Enquiries of Management) and having previously been presented to the Committee for initial comment in March 2024.

The Committee were advised that no significant changes had needed to be made to the management responses following their initial consideration in March 2024 with the response under the General Enquiries of Management in relation to use of solicitors by the Council currently listed as “To be confirmed” currently being finalised.

As no further issues or comments were made in relation to the responses outlined, the Committee RESOLVEDto note and approve the Brent Council Enquiries of Management (as detailed within Appendix A of the report) and Pension Fund Enquiries of Management (as detailed within Appendix 2 of the report) for submission (once finalised) to the External Auditor.

To receive an update on the Council’s Draft Annual Statement of Accounts 2023-24.

(Agenda republished on 10 June 2024 to include the Draft Statement of Accounts)

Ahead of the report being presented to the Committee, the Chair clarified that in accordance with good practice the draft Statement of Accounts 2023-24 were being presented to members for initial consideration and feedback in advance of their main audit which was scheduled to commence on 24 June 2024.

Ben Ainsworth, Head of Finance was then invited to introduce the report presenting the Council’s draft Statement of Accounts 2023-24 following their initial publication.  In considering the report the Committee noted the following key points:

·             The accounts had been published a month earlier than 2022-23 to reflect the earlier statutory deadline for publication on 31 May 2024.  Whilst publication had been slightly delayed beyond the statutory deadline due to additional general fund valuations which had needed to be undertaken compared to recent years, the finance team was commended for their efforts given the shortened timescale for production of the accounts, which had created challenges across the sector.

·             There remained a small amount of work to be completed connected with the valuations, but this was not expected to have a material impact on the final accounts and principally involved the movement of funds between unusable reserves.  It was not anticipated this would have an impact on the planned audit schedule.

·             The inclusion within the Draft Statement of Accounts of a detailed narrative outlining the background, financial context, Medium Term Financial Strategy, Council’s strategic vision and summary of financial performance as an introduction to the core Accounting Statements which set out the Council’s income and expenditure for the year as well as its financial position at 31 March 2024 in compliance with the requirements of the CIPFA Code of Practice on Local Authority Accounting.

·             In focussing on the summary of financial performance, attention was drawn to:

o      the Revenue General Fund Outturn position 2023-24 which whilst reporting a breakeven position had included a transfer from corporate contingency to cover overspends in Resident Services (£11.2m mainly relating to additional pressure in terms of homelessness) and demand led pressures in both the Children and Young People and Care, Health and Wellbeing services with other services showing small underspends;

o      The Core Accounting Statements, with an outline provided of the current position in relation to the Balance Sheet, Movement in Reserves Statement and Earmarked Reserve statements.

o      The Council’s Reserves Strategy which provided the operational framework within which the Council’s reserves were managed and monitored by the Corporate Director of Finance & Resources and Chief Executive including an assessment of the optimum level of general reserves to be held and which recognised the importance of holding adequate reserves to meet the net financial impact of risks facing the Council to ensure the authority was able to continue operating in a financially resilient and sustainable manner.

In response to the update provided the Committee highlighted comments on a number of issues, with the following responses provided:

·             Whilst noting the robust nature of the Balance Sheet further details were sought on the main changes and movements included within the  ...  view the full minutes text for item 10.

This report summarises the work of both the Audit & Standards Advisory Committee and the Audit & Standards Committee for the Municipal Year 2023-24 in accordance with the requirements and principles as set out within CIPFA’s Position Statement regarding Audit Committees (‘Practical Guidance for Local Authorities and Police).

David Ewart, as Chair, introduced the Annual report produced by the Chairs of both Committee’s providing a summary of the work undertaken by the Audit & Standards Advisory Committee and the Audit & Standards Committee during the 2023-24 Municipal Year, in line with the requirements and principles set out within CIPFA’s Position Statement regarding Audit Committees. 

The Committee welcomed the report which was felt to provide a good summary of the activity undertaken and in thanking all members and officers involved for their ongoing support in the work across both Committees it was RESOLVED to note the contents of the Annual Report ahead of it being presented to Full Council on 8 July 2024.

This report sets out the draft Annual Governance Statement (AGS) for 2023-24 as required by the Accounts and Audit Regulations 2015.

Members are asked to note that the AGS is being presented to the Audit & Standards Advisory Committee for consideration, in advance of referral on to the Audit and Standards Committee for formal approval.

Debra Norman, Corporate Director Law & Governance, introduced a report that set out the draft Annual Governance Statement (AGS) for 2023-24 as required by the Accounts and Audit Regulations 2015.

In presenting the report the Committee noted:

·             The seven core governance principles introduced by CIPFA upon which the review of governance arrangements and production of the AGS had been based, as detailed in section 3.5 of the report.

·             That no significant governance issues had been identified relating to 2023-24, however some areas of improvement had been identified, as detailed in section 3.10 of the report.  Details were also provided in relation to progress made in delivery of the Improvement Plan from 2022-23, as set out in section 3.11 of the report.

·             The importance of the AGS in outlining the Council’s framework of control in relation to its Governance arrangements and in terms of managing risk, with the review of effectiveness in relation to governance related issues and ongoing process.

Members were advised that they were being invited to comment on the draft AGS in advance of its formal consideration and approval by the Audit and Standards Committee. As a result, the following issues were highlighted:

·             In noting the assurance included relating to the role of the Audit & Standards Advisory Committee, the Committee were pleased to note that no significant governance issues had been identified within the AGS.

·             Given the focus identified during consideration of the Internal Audit Plan Annual Report (item 8 above refers) on action to improve the level and rate of audit actions being implemented within original timescales, members felt it would also be appropriate to reflect and recommend this as an additional improvement area within the AGS, on which members advised they would also be keen to keep progress under review.

As there were no further comments raised, the Chair thanked officers for the report and it was RESOLVED to recommend the Annual Governance Statement to the Audit & Standards Committee for formal approval, subject to inclusion of the following additional improvement action for 2023-24 within Table 1 of the Annual Governance Statement:

“To improve the level and rate of audit actions implemented within original timescales.”

The paper provides the Audit and Standards Advisory Committee with a report on progress in delivering Grant Thornton’s responsibilities as the Council’s external auditors.

Sophia Brown (Key Audit Partner, Grant Thornton) introduced a report updating the Committee on the progress being made by Grant Thornton in delivering their responsibilities as the Council’s external auditor.

In presenting the report the Committee noted:

·             The progress with completion of the initial planning for the 2023-24 audit of the Council’s financial statements with the detailed audit plan having been issued in February 2024 and no subsequent additional risks having been identified as part of the planning and risk assessment procedures undertaken in finalising the audit plan.  Work was now due to commence on the audit in the week commencing 24 June 2024 with the aim to provide the opinion on the Statement of Accounts by 20 September 2024 to coincide with the deadline for publication of the audited accounts.

·             Value for Money planning work was due to commence in late June with the outcome to be included as part of the final External Audit Annual Report.

·             The outline and schedule of audit deliverables planned for 2023-24, with work on the grants element already in progress.

·             The sector updates provided in relation to emerging national issues and developments which included:

o      progress and plans for the introduction of a series of statutory audit backstops and related updates to the National Code of Audit Practice along with progress in sign-off of delayed local authority audits.  Members were pleased to note that Brent’s audited Statement of Accounts remained up to date with all previous accounts having achieved sign-off and the Committee assured that the backstop arrangements were not anticipated to impact on the Auditor’s capacity to achieve sign off for the 2023-24 Statement of Accounts;

o      The production of a “Must Know” guide by the Local Government Association for local authorities working with new external auditors along with a guide for members to consider in relation to the ongoing effectiveness of Audit Committees and their relationship with the external auditors, which the Chair encouraged all members to consider as part of the Audit & Standard Advisory Committees ongoing review of its own effectiveness.  As part of this process members welcomed the intention to include a member briefing session as part of the Committee’s Development Programme on the role of External Audit;

o      An update on the LGA Improvement and Assurance Framework;

o      Details of a report “The State of the Locals” published by the Local Government Information Unit on public trust in government, including at a local level along with details on additional guidance provided in relation to the preparation of Local Authority productivity plans; publication of a report by the Levelling Up, Housing and Communities Committee on the funding and sustainability of the social housing sector along with supporting data; publication of an analysis relating to local regeneration policy and details on the introduction of new and simpler recycling rules.

In response to a query raised on the scope of external audit activity relating to revenue generating opportunities members were advised whilst not specifically included as core audit activity there may  ...  view the full minutes text for item 13.

To consider the Committee’s Work Programme for the 2024-25 Municipal Year.

It was RESOLVED to note the Committee’s Forward Plan and Work Programme for the 2024-25 Municipal Year subject to the following updates:

·             The update on Emergency Preparedness being rescheduled from July to the meeting on 25 September 2024.

·             Presentation of the final 2023-24 Statement of Accounts and External Audit Findings Report being scheduled for the meeting on 25 September 2024.

No items have been identified in advance of the meeting that will require the exclusion of the press and public.

There were no items of business considered at the meeting which required the exclusion of the press and public.

Notice of items to be raised under this heading must be given in writing to the Deputy Director Democratic Services or their representative before the meeting in accordance with Standing Order 60.

None.