AUDIT AND RISK SCRUTINY COMMITTEE

Minutes of the Meeting held on Thursday, 13th November 2014 at Retford Town Hall Present: Councillor R B Wilde (Chairman);

Councillors B Barker, H Brand, D Challinor, C Entwistle, M T Gray.

Officers: S Brown, L Dore, J Foulger, M Hill, A Snape, N Wilson. Others present: Mr L Towers and Mr J Pressley - KPMG (for Agenda Item No. 7(a)) Mr R Dunlop - Capita (for Agenda Item No. 7(b))

Mr A Ali - Internal Audit (for Agenda Item No. 7(c))

(Meeting commenced at 6.30pm.) (The Chairman welcomed all to the meeting and read out the fire alarm/evacuation procedure and also enquired whether any member of the public or press wished to film/record the meeting or any part thereof. There were no members of the public or press present.) 17. APOLOGIES FOR ABSENCE Apologies for absence were received from Councillors J M Sanger, A Simpson, M Storey and C Troop. 18. DECLARATIONS OF INTEREST BY MEMBERS AND OFFICERS (a) Members There were no declarations of interest by Members. (b) Officers There were no declarations of interest by officers. 19. MINUTES OF THE MEETING HELD ON 11TH SEPTEMBER 2014 RESOLVED that the Minutes of the meeting held on 11th September 2014 be approved. 20. MINUTES FOR ACTION AND IMPLEMENTATION RESOLVED that the Minutes for Action be received. 21. OUTSTANDING MINUTES LIST RESOLVED that the Outstanding Minutes List be received. 22. CHANGE OF ORDER The Chairman advised Members that the Agenda Items would be taken out of order to accommodate the speakers.

SECTION A – ITEMS FOR DISCUSSION IN PUBLIC Other Decisions 23. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES (a) Annual Audit Letter The Committee was presented with the Annual Audit Letter which provides an unqualified audit opinion for the last year’s financial accounts concerning the Council’s arrangements to secure value for money. KPMG are the Council’s appointed external auditor and the letter, which had previously been circulated to all Members of the Council in October, was appended to the report. The letter reported that the Council has proper arrangements for securing financial resilience and challenging how it secures economy, efficiency and effectiveness. In addition, there are good processes in place for the production of the accounts and good quality supporting working papers. A single specific risk which had been identified and then critically assessed by KPMG concluded that sufficient relevant work had been completed by the Council in relation to the risk area. RESOLVED that:

1. The report and its findings be accepted. 2. Thanks be recorded to L Towers for the presentation of the Annual Audit Letter.

(b) Treasury Management The Chairman welcomed R Dunlop to the meeting. He provided Members with a slide show presentation on the topic of treasury management which considered: Member involvement in treasury management; the current economic background; the regulatory structure of treasury management; an overview of the treasury strategy; investment considerations. Members asked questions regarding the impact on the UK economy in relation to what is happening elsewhere in Europe, issues around unemployment, the loss of trust in the banks, the cost of fuel and the housing market. RESOLVED that:

1. The presentation be received. 2. Thanks be recorded to R Dunlop for the presentation.

(c) Internal Audit Progress Reports 2014/15 Members were presented with a summary of the outcome of work completed. Six reports had been finalised in the areas of Estates – Investment and Miscellaneous Properties, the Benefits and Investigation Team, Risk Management, Energy & Sustainability and Council Tax. The report raised 34 recommendations with 2 being classified as ‘High’ risk, 12 as ‘Medium’ risk and 20 as ‘Low’ risk. Details of the key findings were appended to the report which also noted that most of the recommendations had been accepted by management. The two not accepted related to sustainability and benefits investigation referrals: sustainability is not a statutory function although future issues will be dealt with through the sustainable procurement route; an interim measure has been proposed to monitor benefits investigation referrals against targets. The Chairman commented that it had been good to receive a positive report. RESOLVED that:

1. Thanks be recorded to A Ali for the update. 2. The Internal Audit Progress Report 2014/15 be received and the actions taken or to be

taken noted. Key Decisions 24. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES (a) Budget Monitoring and Capital Programme Update Report to 30th September 2014 Members received the Budget Monitoring and Capital Programme Update Report to 30th September 2014 which had been reported to Cabinet on 4th November 2014. The purpose of the report is to: inform Members of the spending position for the period 1st April to 30th September 2014 for the Council’s General Fund, Housing Revenue and Capital Programme and provide an update on any significant variances from the approved budgets; to request approval for new additions, variations and re-profiling to the existing Capital Programme; to provide information on any proposed resourcing of the Capital Programme and the level of Council capital resourcing available including capital receipts; to update Members on Treasury Management budget issues; to provide the regular quarterly update on performance against Treasury Management Prudential Indicators for the period ending 30th September 2014; to provide Members with the mid-year Treasury Management Strategy and Investment Strategy report. The Principal Management Accountant drew Members attention to: income over-achievement due to increased business in planning and development control; the General Fund underspend resulting from a list of items including a refund from HMRC, a forecast of interest due from HMRC in relation to repaid VAT and the cost of Voluntary Redundancies and Voluntary Early Retirements; a potential overspend on the Housing Revenue Account (HRA) relating to voids which had been set at 25 days but was currently 32; the additions and variations to Capital Programme changes; the table for Capital Receipts; the repayment of a short-term loan and a new one taken out as part of Treasury Management which had also seen no further dividend returns from the Icelandic Banks. There were no issues to highlight regarding Prudential Indicators. Members asked questions regarding the money not yet returned from the Icelandic Banks and the potential for reduced income to the HRA. The Head of Finance and Property advised that almost 90% of the money owed from the Icelandic Banks has been returned and that the remaining is likely to be returned in smaller amounts as Icelandic Krona is exchanged into English pounds. The HRA has the potential to become overspent due to the delay in void properties being repaired prior to being re-let. This has been addressed but should it not be rectified, the Council could recoup any loss by reducing the management fee to A1 Housing in the following financial year. The Chairman commented that the Council’s position was better than in previous years with money being spent on capital projects in the year that it had been allocated. The issue with void properties presented a small slippage, but with a new contract issued to improve the turn-around of voids and the diligence of officers, the matter was being addressed. RESOLVED that:

1. The update be received. 2. J Foulger be thanked for her attendance at the meeting.

Other Decisions

25. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES (a) Corporate Risk Management Quarter 2 2014/15 Members were provided with an update on the current level of assurance that can be provided against each corporate risk. Existing risks as identified within both the Council’s corporate and operational risk registers are subject to quarterly review by senior management and on an on-going basis by Internal Audit. The Corporate Risk Register and supporting comments as at the end of Quarter 2 (September 2014) were detailed in the report and included a summary of all control gaps currently identified. The Head of Finance and Property commented on aspects of the current risks and direction of travel on each of the risks detailed. In response to a query regarding the increased demands on the I.T. department due to infrastructure changes, the Head of Finance and Property advised that the Strategic ICT Manager and team were currently coping well. The Chairman added that there had been and would continue to be a considerable amount of work for the team due to the Council’s changing situation which was bringing great benefits to the authority. RESOLVED that progress of actions identified within the Corporate Risk Register be noted. (b) Budget and Policy Framework Procedure Rules The Head of Finance and Property presented a report which provided Budget and Policy Framework Procedure Rules which should form part of the Council’s Constitution. The Procedure Rules set out how the Council, through its Cabinet, makes and approves decisions on budgetary and policy matters and as these have not been included for some years, the report rectified the position by recommending that they be referred to Council for approval. The Procedure Rules include: the framework for Cabinet decisions; the process for developing the framework; decisions outside the budget or policy framework; urgent decisions outside the budget or policy framework; virement; in-year changes to policy framework; call-in decisions outside the budget or policy framework; special provisions regarding calculation of Budget and Precepts. RESOLVED that the Budget and Policy Framework Procedure Rules be noted and the report be recommended to Council for approval. SECTION B – ITEMS FOR DISCUSSION IN PRIVATE Key Decisions None. Other Decisions None. 26. ANY OTHER BUSINESS WHICH THE CHAIRMAN CONSIDERS TO BE URGENT As there was no other urgent business to consider, the Chairman closed the meeting. (Meeting closed at 8.25pm.)