Agenda and minutes

Audit and Resources Committee
Tuesday, 10 July 2018 6:15 pm

Venue: Rooms 16 and 17, Eastleigh House, Upper Market Street, Eastleigh, SO50 9YN

Contact: Cheryll Kemsley, Democratic Services Officer, tel: 023 8068 8112 Email:  cheryll.kemsley@eastleigh.gov.uk  Sarah King, Corporate Director, Support Services (CFO), tel 023 8068 8011 Email:  sarah.king@eastleigh.gov.uk

Items
No. Item

11.

Public Participation

Minutes:

There was no public participation on this occasion.

12.

Minutes pdf icon PDF 66 KB

To consider the Minutes of the meeting held on 12 June 2018.

Minutes:

RESOLVED –

 

That the Minutes of the meeting held on 12 June 2018 be confirmed and signed by the Chairman as a correct record.

 

(NOTE: With regard to Minute 6 – Appointments to Procurement Executive Group – Councillor Ray volunteered to be the second Audit and Resources Committee representative.)

13.

Declarations of Interest

Minutes:

There were no declarations of interest in relation to items of business on the agenda.

14.

External Auditors' Statement

Minutes:

This was taken as item 5 on the agenda.

 

Paul King, Manager, EY, advised the Committee that they had made a start on the audit of the accounts. A number of issues had been identified as ‘other’ or ‘significant’. The Horton Heath development was one that had been identified as ‘significant’ as there were complicated arrangements. He was optimistic that EY would be able to report their findings by the next meeting 23 July 2018.

 

With regards to the Value for Money conclusion, EY needed to assess potential significant risks the Council had around the Medium Term Financial Outlook, primarily around the Council’s interest rate risks. They had had many discussions with officers and were working through the issues. A report would be submitted for the 23 July 2018 meeting.

 

The Corporate Director – Support Services (CFO) added that the Council had submitted all the documents well in advance and was working closely with EY.

15.

Review of Health and Safety, Community Safety and Emergency Planning pdf icon PDF 104 KB

Minutes:

This item was moved to item 6 on the agenda.

 

Consideration was given to the report of the Corporate Director (Strategy) that considered the service areas of Health and Safety and Emergency Planning, reviewed the functions and considered the level of resources required to provide the required level of service.

 

Through the Future Eastleigh reorganisation, a number of roles and functions were identified as not fitting clearly into one of the four organisational themes of Health and Wellbeing, Economy, Housing and Development and Environment.  In order to ensure that the roles were fit for purpose and that they were placed in the appropriate part of the organisation, there had been an internal review.

One of the main aims of the review was to consider the Council’s Corporate Health and Safety function.  The review considered the level and type of resource required; the higher risk areas of the organisation which would need additional support; the role of managers; and the key health and safety risks to the organisation.

Another element under review was the joint Community Safety and Emergency Planning function.  The review considered the level and type of resource required, where the function best sat within the organisation, and how to ensure the Council had enough resilience in a very specialist area to ensure it could respond to a large scale emergency.

The Corporate Director (Strategy) began by going through recommendations (j) to (n) on page three of the report that related to the joint Community Safety and Emergency Planning function, and gave brief background as to how the review had come to these recommendations.

Councillor Atkinson pointed out that the date in paragraph 32 should read 31 March 2019.

The Corporate Director (Strategy) then went through the recommendations (a) to (i) that related to the Council’s Corporate Health and Safety function. She introduced Michelle Miller who was the Council’s facilities manager. Michelle advised that the Council’s Corporate Health and Safety Officer was on long term sick leave and the Council had now employed an interim Health and Safety officer, Cyril Campbell. In response to a question on who had overall health and safety control, Michelle advised that councillors should contact her or Cyril. Cyril was based at Eastleigh House but would be working one day a week at the Hedge End Depot and one day a month at the theatres and country parks. The Events Policy procedure was now in final draft and would be completed shortly. There were to be more quarterly meetings with Management Team and the Health and Safety Management Group to share and gather information. It was proposed that operational managers/supervisors be trained to IOSH level as the Council would be liable, even if there was a risk of an incident. She concluded that she had been working on Lone Working and urged all councillors to get set up on the system. There was also to be a seminar in the autumn for councillors on appropriateness. The Chair requested that the seminar also include information on Lone Working and how councillors could set themselves up on the new system to better ensure their safety in their own constituencies.

RESOLVED –

 

That the report be noted; and that Lone Working be included in the seminar.

16.

Woodside Avenue Housing Project Update pdf icon PDF 77 KB

Minutes:

This was moved to item 7 on the agenda.

 

Consideration was given to the report of the Corporate Director – Service Delivery that updated the Committee on the progress of the Woodside Avenue development.

 

The Council had approved the development at Woodside Avenue at the Cabinet meeting on16 June 2016.

 

Jon Trill, Housing Programme Manager, who joined the meeting for this item, advised that the scheme was a wholly rented scheme comprising a total of 94 units with 36 affordable rented and the remaining 58 being a private rental scheme (PRS). The scheme was made up from 35 x one and two-bed flats with one of the one-bed flats being a wheelchair unit. The remaining 59 units were one, two, three and four-bed houses with five of the three-bed units being ‘Passive Haus’ design.

The affordable units were to be let at 80% market rent and the PRS units were to be let at full market rent.

The landlord was Woodside Avenue Development LLP. Vivid (acting as development agents and Drew Smith Ltd was the contractor), had been awarded a five-year management and maintenance agreement and would provide a full suite of management and maintenance services. The PRS units were let on a standard six-month Assured Shorthold Tenancy agreement with an assurance that the tenants could remain in the property for as long as they wished, providing they paid the rent, looked after the property and were good neighbours. This assurance was rare in the private rented sector and would give residents the certainty they required in providing long-term stability.

Councillor Tyson-Payne enquired if there was any feedback from tenants as she had noticed that full sun was hitting the rooms of some flats and some form of screen had been put up by the occupiers. Jon Trill advised that he would look into it.

The Committee requested that an update be brought back to this Committee in a year’s time.

RESOLVED –

                                             

That the report be noted; and an update be added to this Committee work programme for July 2019

 

(NOTE: Subsequent to the meeting it was confirmed that the Council required Vivid to provide a range of length of tenancy for its market rented customers

They could choose from:

 

Six-months Assured Shorthand Tenancy (AST)

Five-year fixed term (FT)

An assured lifetime tenancy

 

The provisions to gain possession were stated in the tenancy agreement.  Possession was mandatory under the AST but for the FT and Assured Vivid would have to serve the legal notice and defend its case in court – so there was a higher risk with these tenancies

 

From the few properties that Vivid had let already the most popular tenancy was the five-year FT. Affordable tenancies were let in accordance with Vivid’s Tenancy Policy.)

17.

The Point and Berry Theatres Update pdf icon PDF 90 KB

Minutes:

This was moved to item 8 on the agenda

 

Consideration was given to the report of the Commercial Business Manager that provided details on The Point and Berry Theatres following a request from this Committee. Dan Tubb, Commercial Manager and Nickola Moore, Arts and Culture Manager joined the meeting for this item.

 

A report to this Committee in September 2017 provided details of the planned response to an adverse variance totalling £106,000 across The Point and The Berry theatres, incurred during 2016/17. The report indicated that this variance was likely to be repeated in 17/18, (albeit at a reduced level of £81,000), the reasons for this and proposals to address them, including the preparation of a Business Plan.  Members asked for an update on this, together with the outturn report detailing the financial performance of both venues during 2017/18.  This paper provided that detailed update and that Members would note that when considered together, the outturn figures showed that the theatres did achieve budget projections although there were continuing financial pressures forecast in 2018/19. There were further improvements to be made and working in line with the strategic aims of the Corporate Plan, the Business Plan would develop a range of measures to improve ongoing performance and reduce the net subsidy of the Arts and Culture offer.

 

The new Arts and Culture Manager was experienced both in the sector and at an executive level in a more commercial role.  With this knowledge, experience and focus on maximising the artistic and commercial potential of the service, the role would build on the work done to date. It would ensure that the service offer was ambitious; more commercially focussed and was aligned to the Council’s strategic framework.

Councillors felt that the report was incomplete and requested that future reports include the total costs for each theatre. The Committee wished to view the theatres business plans when they were completed and that this be added to the work programme

 

RESOLVED –

 

(1)          That the current financial picture at the Point and Berry and on-going work to address this be noted;

 

(2)          That the appointment of a new Arts and Culture Manager be noted;

 

(3)          That an emerging alignment of strategy and the delivery of Arts and Culture services be noted;

 

(4)          That the preparation of profit focused management accounts and other performance measures to shape future activity be noted; and

 

(5)          That the inclusion of new higher margin activity such as weddings and the reduction in cost from ongoing activities be noted.

18.

Action List pdf icon PDF 50 KB

Minutes:

The Committee considered the Action List, which was taken as item 9 on the agenda, which set out the recent decisions and subsequent actions arising from the Committee.

 

Brett Willers, Environment Lead Specialist, who joined the meeting for this item, briefed the Committee on the Council Owned Land Log which had come under the Health and Safety Review in 2015. It emerged that there was not a land ‘log’ but a list of Large Scale Voluntary Transfer (LSVT) issues. An intern had worked on the list to identify trips/falls, fly-tipping or maintenance obligations but there was no defined log of land. The Direct Services team had been systematically working through the list but it was an onerous task due to lack of resources.

 

The Committee, who had anticipated an actual log to review and to identify land in each constituency, was clearly disappointed that this had not been the case.

 

The Corporate Director – Support Services, advised that she needed more information to understand the risks to the Council of not having a land log. She suggested convening a working group of officers to review it and this would then come back to Committee in October 2018.

 

It was AGREED -

 

That the Action List be noted; and that the Corporate Director – Support Services convene a working group to review the Council owned land log and report back to this Committee in October 2018.

19.

Internal Audit Charter pdf icon PDF 62 KB

Additional documents:

Minutes:

This item was taken as item 10 on the agenda.

 

Consideration was given to the report of the Internal Lead Specialist (Chief Internal Auditor) which explained that with effect from 1 April 2013 all public sector bodies were required to adopt the Public Sector Internal Audit Standards (the Standards). The Standards were adopted by the Relevant Internal Audit Standard Setters in 2013 which include HM Treasury and Chartered Institute of Public Finance and Accountancy (CIPFA), and encompassed the mandatory elements of the Institute of Internal Auditors International Professional Practices Framework.

 

Within the Standards there was a requirement for an Internal Audit Charter.  The Audit and Resources Committee approved the Internal Audit Charter 2017/18 on 18 July 2017.

 

The purpose, authority and responsibility of the internal audit activity must be formally defined in an Internal Audit Charter, consistent with the Definition of Internal Auditing, the Code of Ethics and the Standards. The Internal Auditor Lead Specialist (Chief Internal Auditor) must review the Internal Audit Charter and present it to Management Team and the Audit and Resources Committee for approval annually.

 

Councillor Atkinson requested that all council policies be put on the website. She was advised that this was being reviewed by the Performance and Governance team.

 

RESOLVED –

 

That the Internal Charter 2018/19 be approved.

20.

Annual Internal Audit Report 2017/18 and Monitoring Report for the Period 1 January 2018 to 31 March 2018 DOCX 108 KB

Minutes:

This was taken as item 11 on the agenda.

Consideration was given to the report of the Internal Lead Specialist (Chief Internal Auditor) which contained an opinion on the effectiveness of the Council’s internal control environment, any qualification to that opinion and the outturn for the Internal Audit performance for 2017/18.

On the basis of the reviews and testing that the Internal Audit Section had undertaken during 2017/18, the Internal Audit Lead Specialist confirmed that the Council’s framework of governance, risk management and control was adequate in most areas. However, given the transition to new ways of working, audit testing found that not all controls were operating in practice. This had been highlighted within the appropriate audit report. Limited assurance for the system of control was given in respect of 10 of the 40 audit assignments in 2017/18.

Performance against the Annual Internal Audit Plan for 2017/18 and Quarter 4 was reported in Appendix 1 to the report.

Progress made on the implementation of Internal and External Audit recommendations was detailed in Appendices 2 and 3 to the report.

 

Paragraph 23 of the report be amended to read “A total of 304 recommendations from 40 audit assignments were made in 2017/18 analysed and compared to 170 in 2016/17 (from 25 reviews) as follows:”

 

Paragraphs 32 and 33 identified the major audits and other work that had been completed in quarter four.

 

RESOLVED -

 

(1)         That the Internal Audit Lead Specialist’s Annual Opinion for 2017/18 be noted; and

 

(2)         That the performance of the Internal Audit Section against planned outturn for 2017/18 be noted.

21.

Verbal Updates from Members Representing Strategic Risk Management Group (SRMG) / Procurement Executive Group (PEG)

Minutes:

This was taken as item 12 on the agenda.

 

(a)         Strategic Risk Management Group (SRMG)

 

Councillor Irish reported that there was no update at this time.

 

(b)         Procurement Executive Group (PEG)

 

Councillor Atkinson reported that:

 

Annual Review: It had been disappointing that the 2017 Annual Review was still not available and now 2018 review was due – both reviews were to be included on the agenda for 17 July 2018.

 

Social Value Act: It was noted that the provisions of this Act would be included in the Council’s procurement process where necessary.

 

Contract Standing Orders: Previous discussions had suggested that the Contract Standing Orders increase the level at which a contract was put out to tender from £50,000 to £75,000.  It was reported that in the last 4 years there had been 69 contracts issued with values between £50k and £75 and 250 over £75K.  The Internal Chief Auditor wanted to investigate the 69 contracts in more depth to ensure that they complied with Standing Orders as there may have been some weaknesses there.  It was therefore agreed to keep the level at £50K, for the time being but review in six months.  It was also felt that additional training should be given to staff to ensure they were following CSO’s correctly.

 

Contracts Register: This was not available for this meeting as it was still being updated and reviewed – on the Agenda for 17 July 2018.

 

Sustainability: A contract was now in place to bring the Utility bill validations for energy savings in house; and the Depot was reviewing its fleet to increase the electrification of vehicles where possible.

 

Work programme:  This was now to be a regular item on the agenda to ensure all actions agreed were completed.  This would include an Action Plan, Performance monitoring, Annual Review and contracts register.

22.

Cabinet Forward Plan pdf icon PDF 54 KB

Minutes:

This was taken as item 13 on the agenda.

The Committee considered the current Forward Plan of Key Decisions.

 

It was AGREED -

 

That the current Forward Plan be noted.

23.

Work Programme pdf icon PDF 54 KB

Minutes:

This was taken as item 14 on the agenda.

The Committee considered its current Work Programme and amended as necessary.

 

It was AGREED -

 

That the Work Programme be noted.