There were no apologies for absence.

To receive details any details of members nominated to attend the meeting in place of a member of the committee.

There were no named substitutes.

To receive any declarations of interest by Members in respect of items on the agenda.

Councillor RJ Phillips declared a non-pecuniary interest in agenda item number 7 as a member of West Midlands Employers.

To approve and sign the minutes of the meeting held on 29 November 2017.

Following a request for clarification from a member of the committee,   it was agreed at minute number 254 the constitution review working group be asked to consider whether the withholding of upheld complaints following the informal resolution by the monitoring officer was still appropriate.  

RESOLVED:

That the minutes of the meeting held on 29 November 2017 be confirmed as a correct record and signed by the chairman.

To receive questions from members of the public.  

Deadline for receipt of questions is 5.00 pm on 19 January 2018.

Accepted questions will be published as a supplement prior to the meeting. 

Please submit questions to: councillorservices@herefordshire.gov.uk

There were no questions from members of the public. 

To receive questions from members of the public.  

Deadline for receipt of questions is 5.00 pm on 19 January 2018.

Accepted questions will be published as a supplement prior to the meeting. 

Please submit questions to: councillorservices@herefordshire.gov.uk

A copy of the Member questions and written answers is attached to the minutes at Appendix 1.

To update the committee on progress in implementing the recommendations relating to capital project management and control raised in the Internal Auditors audit findings report regarding the joint customer services hub (Blueschool House) capital project presented in September 2017.

The chief finance officer presented the report.   The following points were highlighted: 

·         This was an update on the 13 recommendations made by SWAP following their audit of the issues around the Blue School House project.

·         A range of other actions were being considered by the internal control improvement board. 

·         From 1 April, the systems will be in place for project management which would ensure that the approval points for capital projects were understood and documented. 

·         A system of validation / confirmation was being put in place when a senior manager had announced they were leaving the council.    Another member of the senior team would be identified and would need to approve projects as well.  This system would also cover any  interim arrangements at a senior level.    

Following queries from members of the committee, it was confirmed:

·         In respect of anecdotal evidence that professional advice may be deleted from draft reports assurance was provided that the process is now more robust than previously.   The on-line report management system and sign off process ensures there are double checks in place and reviewers had sight of the final version of the report.   It was recognised that it would take time to embed the process but the underlying controls are in place. 

·         The principles of decision making were included within the member induction processes.   The issue has been that it has not been covered consistently at member and officer level.  

·         Feasibility work is carried out but again the issue is consistency.   The system being put in place will ensure that there will be a need for clarity about the gross costs and it will have to stay within the feasibility study budget.  As part of the new process, all work on a project will stop after the feasibility study until a decision is taken about whether the project will proceed and this will be dependent on funding being identified. 

·         Capital programme monitoring does take place but not consistently.   Projects managers do monitor spend but there are varying ways to do this.  This will be built into Business World so all reports will be consistent and the same.   Councillors Powers and Harvey were thanked for their comments on the new system.

·         The new project management system could flag when contracts were due for renewal and would work back from the renewal date to ensure that the appropriate stages and decisions were built into the project.  

·         That projects identified within the capital programme will need their own governance arrangements.  

·         There had already been plans in place to implement a new report management system as the previous system was not sufficiently robust.   SWAP had identified that relevant information was not being made available to officers or members at the appropriate time. 

·         The new project management system would be in place by 31 March 2018 but there would be a need to change the culture of the organisation in order to ensure that the system was understood and embedded and this would take longer to embed.

·         That an  ...  view the full minutes text for item 263.

To report progress made towards implementing the agreed action plan in response to issues identified in the 2016/17 annual governance statement; and to agree the process and timetable for undertaking the review to inform the development of the 2017/18 annual governance statement.

The head of corporate governance presented the annual governance statement progress report and highlighted the following: 

·         There is reference to Blue School House within the report to assure the committee that the issue was not being ignored.   However, the issue had come to light after the approval of last year’s annual governance statement.  

·         The time scale for next year’s statement had been brought forward. 

·         That the independent person would be consulted on issues and risks in relation to the member code of conduct as part of the information gathering exercise for the next statement.  

Following a query from a committee member, it was confirmed that the members’ code of conduct would be considered by the constitution review working group.

It was noted that concern remained over the deferment of the decision at the last audit and governance committee meeting over the naming of town and parish councils involved in code of conduct complaints.    It was felt by some members of the committee that this did not evidence the behaviour of leadership, transparency, and openness, especially as this information had been released under a Freedom of Information request. 

RESOLVED

That the report be noted.

To update the committee on progress in the planning for the preparation of the 2017/18 final accounts and management responses to items raised in the External Auditors audit findings report presented in September.

The chief finance officer presented the report.   It was confirmed that the finance business support officer would act as the single point of contact for the audit.

Following a query from a member of the committee, it was confirmed that a firm of valuers had been appointed in relation to the disposal of property holdings in Rotherwas.    The firm’s expertise was in council valuations.     It was confirmed that the council do use a variety of professional valuers for disposing of council property. 

Following a concern raised by a committee member, it was confirmed direct contact had been made with all tenants in Rotherwas with regard to the disposal of the freehold interest.   The advice which had been received by the council was that auctioning the properties was the best way to achieve best value for money.   If there had been any breakdown of communication between the council and the tenants, then this would need to be addressed.  

RESOLVED

That the report be noted.

To review and agree the external auditors audit plan for 2017/18.

Grant Thornton presented the presented and highlighted the following:

·         The scope was public sector audits was broader than private sector audits and also covered value for money.

·         The risks to the audit were set out in pages 45 to 47 of the pack

·         The early close of the audit (from September to July) would be a significant challenge for both the council and Grant Thornton.

Following a query from a member of the committee, it was confirmed that whilst the checking of the pension liability should be straightforward, the methodology used by actuary would still need to be checked.   It was noted that the ability to drill down on the payroll accuracy may be more difficult. 

Following a question from a member of the committee, Grant Thornton confirmed that with regard to the accumulation of non material items, they use the concept of tolerable error.  This is used towards the end of the audit.   If there was any issue which was over the materiality threshold, then it would be referred to the committee for consideration and then Grant Thornton would make a decision as to whether or not to give an unqualified audit opinion.  It was agreed that Grant Thornton would provide a training session to the committee on materiality.  

The chief finance officer and Grant Thornton confirmed that there were ongoing conversations about how to treat the Hoople pension liability in relation to the Local Government Pension Scheme.   It was noted that this had the potential to be a material issue and if it does not appear on the council’s balance sheet, then it will not appear as a risk.    This issue will be kept under review by Grant Thornton. 

It was confirmed that Grant Thornton are the external auditor for Hoople.    The chief finance officer agreed to provide a briefing note on the work SWAP conduct in auditing the processes which Hoople carry out on behalf of the council, together with the system Hoople have in place for internal audit control. 

Following a query from a member of the committee, Grant Thornton confirmed that they do ask for assurance that the organisation is acting legally.  

To review the external auditors certification letter in relation to the housing benefit subsidy claim for 2016/17 as submitted by Herefordshire Council.

The housing benefit grant certification report was presented.    

Grant Thornton were thanked for their work.

RESOLVED: 

That the report be noted

To provide an update on the work programme for the committee.

The work programme was discussed and agreed. 

It was agreed that the chief finance officer would prepare a briefing paper and a training session would be arranged in connection with income received by the council; details of the handling of that income in relation to statutory limitations and what happens when there is a surplus of income versus costs.  

RESOLVED:

That the report be noted