Agenda and draft minutes

Apologies for absence were received from Councillor Jayanti Patel (with Councillor Maurice attending as substitute) and Rhys Jarvis (Independent co-opted member)

Prior to consideration of the main agenda David Ewart (as Independent Chair) took the opportunity to apologise to members for the scheduling of meeting, which it was noted had clashed with Diwali.  In highlighting the efforts made to avoid clashes with key religious festivals, members were advised that it had not been possible to achieve on this occasion due to the timescales involved in the update on the Interim Audit Findings needing to be considered in relation to the Council’s Statement of Accounts.

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.

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

There were no deputations considered at the meeting.

To provide an update on the progress and findings regarding the external audit being carried out by Grant Thornton for the year ending 31 March 2024 in relation to:

(a)        The Council’s Statement of Accounts

(b)        The Council’s Pension Fund

4.1     Audit Findings Report for the Brent Pension Fund

Matt Dean (Grant Thornton) introduced the interim Audit Findings report for the Brent Pension Fund with a summary of the key issues noted as follows:

·             Work on the audit process was substantially complete with no adjustments to the Pension Fund financial statements having been identified.  The process had identified a number of unadjusted differences (totalling £2.2m) in the valuation of the Fund’s investments and valuation statements received from third-party investment managers, which members noted had been detailed in Appendix D of the report but had not required any amendment to the financial statements on the basis that the differences were not classed as material.

·             Subject to completion of the audit process and quality review, no matters had currently been identified that would require modification of the unqualified audit opinion although it would not be possible to issue the final audit opinion until the audit of the Council’s financial statement of accounts (as Administering Authority of the Fund) had been completed.

·             The significant risks identified within the Audit Plan and approach undertaken to assess these as part of the audit process, which had included – management override of controls; risk of fraud in revenue recognition and valuation of level 3 investments.

·             The summary of recommendations raised with management as a result of the audit process, along with management responses, as detailed within Appendix B of the report, which had been focussed around the Fund’s process for monitoring financial performance and agreement between the Fund and a custodian both of which had been assessed as low risk.

·             The summary of follow up actions undertaken in relation to the previous year’s audit recommendations, as detailed within Appendix C of the report including the introduction of further controls in relation to access to the Oracle IT system.

The Chair thanked Matt Dean for the update provided and then invited comments from members, with the following issues raised:

·             In response to a request for clarification, further details were provided in relation to the risk identified around the valuation of Level 3 investments. It was noted these investments were held in private equity, infrastructure and private debt with the risk focussed around the estimation provided within the accounts being based on the latest available information from the custodians rather than exact value.  The sample testing undertaken had identified understatements in the valuation of three funds which, whilst below performance materiality levels and not therefore requiring adjustment of the financial statements, had been reported as an unadjusted misstatement.

As no further issues were raised Councillor Chan (as Vice -Chair and Chair of the Audit & Standards Committee) also took the opportunity to thank finance officers for their efforts in preparing the financial statement and Grant Thornton for their work in progressing the final audit.

Having welcomed the interim findings, the Committee RESOLVED to note the update provided on progress in completion of the External Audit relating to the Brent Pension Fund 2023 – 24 Statement of Accounts.

4.2   Audit  ...  view the full minutes text for item 4.

This report provides the Committee with an update on the Council’s Strategic Risks as of September 2024.

Darren Armstrong (Deputy Director for Assurance and Resilience) introduced a report, providing an update on the Council’s Strategic Risks as of September 2024.

In considering the report the Committee noted:

·             The Strategic Risk Register had been prepared in consultation with risk leads, Departmental Management Teams and the Council Management Team and summarised the risks that were considered to have an impact and/or likelihood of materialising and which may adversely affect the achievement of the Council’s corporate objectives.

·             Since the report was last updated in March 2024, the Council had continued to operate in a heightened risk environment with the Council’s overall risk profile therefore continuing to reflect the challenging risk environment the Council was operating within.

·             In terms of the main changes since March 2024, a number of risk scores had increased including those identified in relation to the lack of affordable accommodation (Strategic Risk A) and Council’s financial resilience and sustainability (Strategic Rick H) with 8 out of 14 strategic risks identified within the Strategic Risk report included as Appendix 1 to the report sitting outside of their target risk score and one (in terms of trend) showing a small downward movement (Risk G: Cyber Attacks)

·             Since the update in March 2024 two new risks had been added to the Strategic Risk Report.  The first related to the risk to community cohesion (Strategic Risk D) with the risk included to reflect the Council’s awareness of emerging global and national events that could have a local impact and create tensions amongst communities. While the risk had scored highly it was felt to represent more of a precautionary measure given the proactive nature of the work being undertaken by the Council to manage and monitor the situation and the risk demonstrating the Council’s commitment to community resilience and to provide reassurances that appropriate measures were in place.  The second risk related to Emergency Preparedness, Response and Recovery (Strategic Risk: K) which had been included to reflect the risk of failing to adequately prepare for and/or respond to a major incident in Brent given the significant impact on the health, safety or well-being of residents, communities, businesses or staff and ability to deliver critical services.  It was noted this had also reflected publication of the final report from the Grenfell Enquiry, which had highlighted a number of related issues, areas and recommendations for consideration.  Members were made aware that whilst this risk had previously formed part of a wider suite of inherent risks held and monitored at the departmental risk register level, it had now been included with the Strategic Risk Report following a review of how the Council’s strategic risks were reflected and presented, in order to ensure a consistent approach.  In this respect it had not been identified as an escalated risk but had been added to reflect a change in the Council’s risk management approach as part of ongoing efforts to continue to improve and enhance the Council’s risk management framework.

·             The Committee’s attention was drawn to  ...  view the full minutes text for item 5.

To consider the Audit and Standards Advisory Committees future work programme 2024-25.

The Committee RESOLVED to note the Committee’s Forward Plan and Work Programme for the 2024-25 Municipal Year.

Notice of items to be raised under this heading must be given in writing to the Head of Executive and Member Services or his representative before the meeting in accordance with Standing Order 60.

At the request of the Chair, the Committee received a brief update from Minesh Patel (as Corporate Director Finance & Resources) providing an initial assessment of the Chancellors Autumn Statement and impact on the financial position relating to the Council’s budget and pressures being experienced across the local government sector more generally.

It was noted that further updates would be provided following the Local Government Financial Settlement being announced in December 2024 with the assumptions included within the Council’s draft 2025-26 budget (due to be presented to Cabinet in November 2024) broadly reflecting the announcements made to date and the pressures identified in relation to homelessness, cost of temporary accommodation and deficit in relation to High Needs Dedicated School Grant likely to remain as significant challenges with members also supportive of a move towards the provision of longer term funding settlements.

The Chair thanked Minesh Patel for the update, which was NOTED by the Committee.