Agenda and minutes

There were no declarations of interest.

The minutes of the meeting held on 1 November 2022 were approved as a true record and were signed by the Chairman.

Report of the Director - Finance and Corporate Services

Ms Thomas from BDO, the Council’s internal auditors, presented the Internal Audit Progress Report which highlighted the completion and issuance of two reports from the 2022/23 Internal Audit Annual Plan.

She confirmed that the Council was making good progress in completing the 2021/22 recommendations, with nearly all being completed apart from two related to planning and S106, and which were due to be completed in January 2023.

In relation to the Internal Audit findings, Ms Thomas said that IT Asset Management audit had received a moderate rating for Design and a substantial rating for Effectiveness. She explained that the review had looked at the Council’s physical IT assets and software licensing arrangements, including assessing the controls in place for disposal and management of the lifecycle of hardware.

She explained that a medium rating had been found in relation to the Council not having documented procedures in place for the management of IT assets and that policies scheduled for review in March 2022 had not been reviewed at the time of the audit. She noted however that the Council did have many associated policies in place regarding hardware and encryption but that it was recommended that all information be incorporated into one document.

Members of the Group referred to the Council’s process for reviewing software licences and the lack of IT process documentation. Ms Thomas confirmed that the Council did have a system in place to alert if more or fewer licences were required, but that internal audit had recommended that a more proactive approach be taken. The Service Manager for Finance confirmed that the Council did have IT policies in place which worked well and that the finding was that they be brought together into one place.

In relation to the Asset Refresh Policy, Ms Thomas said that the Council had processes in place monitoring the lifecycle of equipment but that inclusion of more detail, including in relation to oversight of the process, had been recommended.

In relation to the Health and Wellbeing audit, a moderate rating for both Design and Effectiveness had been made and three medium and three low level findings were raised.

Ms Thomas explained that one of the medium ratings related to the Council not having a detailed, overarching, strategy to outline responsibilities and its approach towards managing employee health & well-being, including information about the activities and work that the Council provided in relation to health and well-being. She noted that Management did not concur with this moderate rating.

Ms Thomas explained that the second medium rating related to health and well-being KPIs for sickness absence monitoring being limited to the number of days lost to sickness, that although the Council recorded causes of sickness absence this information was not currently included in the KPIs. The Council having a broader suite of KPIs was recommended. She noted that Management did not concur with this moderate rating.

Ms Thomas said that the third medium rating related to the Workplace Health intranet not being updated  ...  view the full minutes text for item 21.

Report of the Director - Finance and Corporate Services

The Chairman introduced the Capital and Investment Strategy item and noted that Cipfa recommendations had changed to recommend that this information be reported quarterly, with this being the mid-term report.

The Service Manager for Finance presented the Capital and Investment strategy Mid-year Report 2022/23, which summarised the Council’s capital and investment activities for the period 1 April to 30 September 2022. She confirmed that the previous update had been presented to Members of the Group at the meeting on 1 November 2022.

In relation to the economic forecast, the Service Manager for Finance said that inflation was currently at 10.1% and forecast to reach 12% in the next few months. Interest rates were currently at 3% and forecast to peak at 5.2% by March 2023.

In relation to investment income, the Service Manager for Finance said that whilst the Council had budgeted to receive £673k in investment income in Q1, this had been revised to become £1.3m due to increases in interest receipts. She said that the Council had received an average interest rate of 2.16% across its diversified investment portfolio and that the rate received depended on when the investment was made, with investments made earlier in the year earning lower interest. Short-term investments were currently preferred, to benefit from the increasing interest rates. She explained that the Council had a greater spread of investment durations now than this time last year when there had been a greater need to hold more cash for liquidity purposes. She noted that £40.8m of investments related to funds held in relation to Section 106 and CIL Agreements. The Service Manager for Finance added that the Council was showing good average interest rates compared to Sterling Overnight Index Average (SONIA) rates for investments of longer duration.

The Service Manager for Finance said that as there was currently a deficit on the capital value of the Council’s diversified funds and so the Council had earmarked funds from this year and last year’s efficiencies savings as mitigation.

The Service Manager for Finance explained that as the Council did not eternally borrow, borrowing liability limits were of less relevance, noting that the Council’s liability benchmark currently stood at $41m. She, said, however, that the Council’s internal need to borrow had increased slightly due to a delay in capital receipts from Hollygate Lane.

In relation to prudential indicators, the Service Manager for Finance said that there was no change from Q1 and that capital underspend was projected to be circa £6m, primarily due to Support from Registered Housing Providers, Bingham Hub and re-profiling of expenditure on other operational land and buildings. The financing costs to net revenue stream showed an improved position due to higher investment returns and higher interest rates. She added that the expected investment position was higher due to rephasing of the capital programme and additional S106 monies.

In relation to Capital Financing Requirement (CFR), the Service Manager Finance said that the position would be greater than predicted due to the delayed receipt  ...  view the full minutes text for item 22.

Report of the Director - Finance and Corporate Services

The Service Manager for Finance presented the work programme report which detailed the proposed Governance Scrutiny items for 2022/23.

The Service Manager Finance confirmed that the Statement of Accounts and the Annual Audit Report had been carried forward from today’s meeting to become agenda items at the 23 February 2023 meeting. She explained that this was due to a national issue with infrastructure assets as part of the audit, and that as such the auditors were unable to sign off the accounts until the consultation had been completed.

The Service Manager for Finance reminded Members of the Group that training on the Statement of Accounts was scheduled to be held before the February 2023 meeting.

The Chairman referred to the Skills Audit which all Councillors had been asked and to complete and encouraged Members of the Group to complete it.

The Chairman referred to the Redmond Review which had looked at the appointment of an Independent Member to this Committee and confirmed that it would report back to a meeting next year.

It was RESOLVED that the Group noted the work programme:

23 February 2023

·       Internal Audit Progress Report

·       Statement of Accounts

·       Annual Audit Report

·       Annual Audit Strategy Plan

·       Risk Management – Update

·       Capital and Investment Strategy Monitoring Q3

·       Capital and Investments Strategy 2023/24

·       Work Programme