To approve as a correct record the minutes of the Audit Committee held on 3 October 2024.

The minutes of the Audit Committee meeting held on 3 October 2024 were approved as a correct record.

There were no items of urgent business.

No interests were declared.

The Chief Accountant introduced the report and explained that Binder Dijker Otte (BDO) are responsible for the legacy years 2020-2021, 2021-2022 and 2022-23. Further to the backstop guidance given last year, the position is a disclaimer opinion has been given by the external auditors for those years largely due to the objection which is the main issue holding things up and the investments. In 2023-24 the external auditors changed to Ernst Young (EY). The likelihood is EY will also give a disclaimed opinion. A draft set of accounts for 2023-24 will be received by the end of the month. The backstop date for 2023-24 is the 28^th February 2025. The aim is to get the 2024-25 accounts into a much better position.

Rachel Brittain from BDO confirmed that they are still working through the investments and don’t have all the valuations they need to provide assurance. She confirmed they are likely to give a disclaimed opinion and they are working internally on the wording of that opinion. The objection is complex in nature with lots of avenues to explore. All the issues are closely tied up eg investment valuation, objection and value for money. A commentary will be issued on value for money.

The Chair requested that some of the opinion terminology is explained.

Rachel Brittain from BDO explained that an adverse opinion will confirm that the numbers in your financial statements are wrong by a certain amount of money. A disclaimer opinion is where the accountants believe there is a material uncertainty but they cannot determine the number that is materially wrong.

The Chair queried if there were any negatives in missing the backstop date.

Rachel from BDO stated that the backstop was missed due to the objection and she doesn’t believe there is a particular consequence to that. It is a valid exception in the legislation.

Members queried the objection and the timeline for dealing with it.

Rachel from BDO stated there are set timelines for responding and she expected it to be closed by May 2025.

Members queried if Local Authorities are to merge under devolution how it will work if there accounts are at different stages. The S151 officer stated that it will not stop new councils being formed but it will need to be considered and managed.

The Co-opted member queried if the meeting with EY took place on 15^th January 2025. The s151 Officer confirmed it did and she was present, the Chief Accountant and the commissioner Nicole Wood.

Members queried how long this could go on for. Rachel from BDO stated that the 2023/24 accounts still needed to go through the inspection cycle so more objections could be received. No more objections can be received for the previous years.

RESOLVED:

1.1      The Audit Committee noted the position for the outstanding external audits of the Council’s statement of accounts covering 2020/21, 2021/22, 2022/23 and 2023/24.

The Chief Operations Lead for Place introduced the item and explained as follows: -

• 842 complaints have been received so far this year. In April the fortnightly collections were introduced and the subscription for garden waste and in July the food waste collection service was rolled out.
• 228 complaints were received in April and May and 228 complaints were received in July and August which were periods where major changes were taking place to the service. In quarter 3 which covers October, November and December complaints have dropped down to 118.
• Responses to complaints within the target of 10 days have gone up from 91% to 95% and the average time taken to respond has reduced from 7 days to 6.
• A twice weekly report is received on complaints. Crews are held to account and if a bin is missed if the crew are still out they try to resolve issues on the same day.

Members queried what the most popular complaint is. The Chief Operations Lead for Place responded that the highest is for missed collections.

Members queried if more information could be given to residents and noted that he was receiving complaints about missed bins but when he investigated the resident was using the wrong bin. It may have reduced complaints earlier if this was communicated to the resident.

Members asked about compliments. The Chief Operations Lead responded that they do receive compliments and they always pass them on to the crews as it matters a lot to staff.

Members queried if there were any more changes to the service coming. The Chief Operations Lead stated that they were changing some routes which means some residents bin collection day would change. The residents that this applied to will be written to.

The Executive Director for Corporate Services and Monitoring Officer introduced the report and explained that the Annual Governance Statement is the council’s self-assessment of its governance arrangements. The decision was made to revise the original draft 2020/21 Annual Governance Statement to take account of the failings of the past which emerged later such as the debt and excessive borrowing. The level of assurance is low as to the governance arrangement in place at that time. The Executive Director for Corporate Services and Monitoring Officer stated that the officers present tonight were not working for the council at that time and therefore the degree to which they can answer questions is limited.

The Executive Director for Corporate Services and Monitoring Office reassured the committee that the quality, detail and level of assurance in the 2023/24 Annual Governance Statement is much improved.

Members queried what measures have been taken to improve governance.

The Executive Director for Corporate Services and Monitoring Officer confirmed that a local governance code is in place and will evidence what the council has in place to give members and the public assurance that governance is in place. It wasn’t credible to keep the previous level of assurance in place as it is the opinion of officers looking back at the previous opinion that it was inaccurate.

Members queried what they can do to support this process.

The Executive Director for Corporate Services and Monitoring Officer going forward the 2023-24 Annual Governance Statement will demonstrate the work the council has done as part of the improvement plan. It will need scrutiny and challenge from members. No organisation is perfect in terms of governance.

Members queried why they have gone back to 2020-21 but not further back.

The S151 Officer confirmed that they have gone back to that date as there are accounts still open from that date.

The Co-opted Member Jasdip Singh queried if it leaves the council exposed in any way.

The Executive Director for Corporate Services and Monitoring Officer confirmed that he didn’t think so. The investment portfolio failed and it should have been identified as a big risk.

ACTION

Members requested more details on the nature of the frauds. The Executive Director for Corporate Services and Monitoring Officer confirmed that he did not have this information but this could be shared with Members outside of the meeting.

RESOLVED:

The Audit Committee:

2.1                  Noted the content of the revised draft Annual Governance Statement 2020-21

2.2                  Noted that in-line with statutory requirements the revised draft Annual Governance Statement was published on the Council’s website.

2.3                  Noted that this revised draft Annual Governance Statement replaces the originally published draft 2020/21 Annual Governance Statement.

2.4                  Noted the Action Plan emerging from the revised draft 2020/21 Annual Governance Statement.

2.5                  Approved the revised draft Annual Governance Statement 2020-21, prior to it being signed by the Leader of the Council, and published as final, on the Council’s website.

The Executive Director for Corporate Services and Monitoring Officer confirmed this report is the same process as for the previous item but for the following two years 2021-22 and 2022-23.

Members queried the lack of detail in relation to the issue of fraud.

The Executive Director for Corporate Services and Monitoring Officer confirmed that the level of detail will always be a summary of overall performance but members were absolutely right to challenge that. If fraud has been high for a number of years it should be something on the action plan.

The Co-opted Member Charles Clarke queried the timeline for completing the action points.

The Executive Director for Corporate Services and Monitoring Officer confirmed that in a normal year the action points would be addressed in the following year.

ACTION

The Co-opted Member Charles Clarke requested that when they bring the next Annual Governance Statement to the Committee an appendix is provided to confirm that the previous actions have been dealt with.

RESOLVED:

The Audit Committee:

2.1          Noted the content of the revised draft Annual Governance Statement 2021-22 and 2022-23

2.2          Noted that in-line with statutory requirements the revised draft Annual Governance Statement was published on the Council’s website.

2.3          Noted the Action Plan emerging from the Annual Governance Statement.

2.4          Approved the revised draft Annual Governance Statement for 2012-22 and 2022-23, prior to being signed by the Leader of the Council, and published as final, on the Council’s website.

The S151 Officer confirmed that the Statement of Accounts 2023-24 and the Corporate Risk Register reports were unlikely to be ready by the 6 February 2025 meeting.

The committee discussed the fact that the next meeting is only a few weeks away and meetings would be of more use if spread evenly across the year. The committee agreed that the February meeting could be delayed.