Agenda and minutes

Audit and Resources Committee - Tuesday, 7 March 2017 6:15 pm

Venue: Rooms 11/12/13 Eastleigh House, Upper Market Street, Eastleigh, SO50 9YN

Contact: Cheryll Kemsley, Democratic Services Officer, tel: 023 8068 8112 Email:  Sarah King, Corporate Director, tel 023 8068 8011 Email:

No. Item


Public Participation


There was no public participation on this occasion.


Minutes pdf icon PDF 143 KB

To consider the Minutes of the meeting held on 17 January 2017.




That the Minutes of the meeting held on 17 January 2017 be confirmed and signed by the Chair as a correct record subject to Minute 3 – Health and Safety Review 2016 recommendation (1) - amended to read ‘That the variety of lone working devices available to staff and Members for agile working be noted.’


Internal Audit Monitoring Statement for the Period 1 October 2016 to 31 December 2016 pdf icon PDF 395 KB


Consideration was given to the report of the Chief Internal Auditor which updated Members on the progress made against the Plan for quarter 3, listed in Appendix 1 to the report.  Progress made on the implementation of internal and external recommendations were detailed in Appendices 2 and 3 to the report. Members were advised that in Appendix 2, ‘Markets’ the final column  be amended to have ‘(Note 2)’ added to reflect that the responsible officer had accepted the recommendations, however the deadlines for these required an extension and would be addressed as part of the service redesign.


With regards to resources, Members were advised that interviews had taken place for an Internal Audit Specialist for a fixed term of twelve months and an applicant had been offered the position and references were being taken up. The person had been working for the Council on a temporary contract so was already up to speed with the systems. Members asked that they be emailed as soon as the post had been officially confirmed.


In response to a question regarding the review of receipted market income and the response to a report that was due on 24 February 2017, Members were advised that it was a diminishing income but Jo Calcutt, Strategy Lead for Economy, was gathering the information and the Chief Internal Auditor would report this back to the Committee’s next meeting.




(1)  That the internal Audit Monitoring Statement for the third quarter of 2016/17 be noted; and


(2)  That the progress made on the implementation of Internal and External Audit recommendations be noted.


Strategic Internal Audit Plan 2017/18 - 2019/20 and Annual Internal Audit Plan 2017/18 pdf icon PDF 241 KB


Consideration was given to the report of the Chief Financial Officer and Chief Internal Auditor that presented the Strategic Internal Audit Plan for 2017/18 to 2019/20 and Annual Internal Audit Plan 2017/18. The Strategic Internal Audit Plan had been prepared on behalf of the Chief Financial Officer in recognition of her responsibilities under S.151 of the Local Government Act 1972 and the Accounts and Audit Regulations 2015, and in accordance with the Public Sector Internal Audit Standards 2013.


Members asked why, on Appendix 1 to the report, no dates were planned for the Corporate Systems in 2018/19. The Chief Internal Auditor responded that the reviews were undertaken every two-three years and would not be reviewed again until 2019/20. To clarify this in future, Members requested that dates be inserted in these instances so they could monitor when systems were up for review. They also noted that there were some missing ratings in Appendix 2 to the report and were advised this would be amended and recirculated to them following the meeting.




(1)  That the Strategic Internal Audit Plan for the period 2017/18 to 2019/20 be approved; and


(2)  That the Annual Plan for 2017/18 contained within the Strategic Internal Audit Plan be approved.


Certificate of Claims and Returns Annual Report 2015-2016 pdf icon PDF 32 KB


The Chair welcomed Martin Young (Manager, EY) to the meeting. Martin tendered Paul King’s (Executive Director, EY) apologies.


Consideration was given to the report of EY, which summarised the results of their work on the Council’s 2014-16 claims and returns.


Martin Young advised that EY had checked and certified the Council’s Housing Benefits subsidy claim with a total value of £31,146,299 presented for certification. They had identified one error in a sample of twenty Rent Allowances cases with an underpayment of £19.62 which had been corrected.


The next Certificate of Claims report would be presented to the Committee in December 2017.


Members welcomed the report and the Chair thanked EY for the report.




That the Certificate of Claims and Returns Annual Report 2015-2016 be noted.


External Audit's Annual Audit Plan pdf icon PDF 93 KB


Martin Young, Manager EY, introduced the Audit Plan for year end 31 March 2017. The Plan comprised an overview, financial statement risks, and arrangements for economy, efficiency and effectiveness. It gave EY’s opinion on whether the financial statements of the Council presented a true and fair view of its financial position, and of the income and expenditure. EY would also provide a statutory conclusion on the Council’s arrangements to secure economy, efficiency and effectiveness.


Within the financial statement risks, EY would test the appropriateness of relevant transactions or balances generated in the Council’s single entity, or group financial statements. Investments in specific housing projects were ring-fenced into Special Purpose Vehicles (SPVs) of Aspect Building Communities Ltd. These SPVs were set up as a limited liability partnership isolating other partners from risk associated with specific projects. Woodside Developments LLP was incorporated in June 2016 to which the Council had provided grant funding for housing development in the Borough.  As well as looking at the risk of management override; and Value for Money (VFM) risks, EY would focus on reviewing the outturn against the 2016/17 budget; review the 2017/18 budget and the Medium Term Budget Strategy (MTBS); ensure that the revenue impact of significant capital projects had been integrated into the MTBS (including Housing Company, Fleming Park and Ageas Bowl refinancing); consider the reasonableness of the Council’s interest rate assumptions; and review progress in developing and delivering the Council’s efficiency strategy and service redesign.


Members asked how they themselves could review the whole housing structure accounts, including those companies that were an offset of the Council, to obtain a full understanding. The Corporate Direct – Support Services (CFO) advised that the Housing Development accounts, and other companies’ accounts, would be included in an annual report, with a shaded flow chart to give clarity tothe structure. There would also be a briefing to all Councillors at the Council AGM in May 2017.


The Chair thanked Martin Young for his EY’s report.




That the Annual Audit Plan be noted.


Fleming Park Redevelopment - Update


The Corporate Director – Support Services (CFO) reported that the Leader had given a full update at the recent Council meeting on 23 February 2017 and there was not a great deal to add other than the project was on budget and on target; the pool would shortly start to be filled and emptied a number of times to ensure that it was completely watertight; and the Combined Heat and Power (CHP) was now on site.


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


Procurement Executive Group (PEG)


Councillor Atkinson reported that there had not been a meeting since the last one she reported on, and she was unable to make the next one on 21 March 2017. Councillor Tennent volunteered to update the Committee.


Strategic Risk Management Group (SRMG)


Councillor Irish reported the following:


·  The Risk Register – This was to be linked in with the Corporate Plan with fewer columns and the format made clear what progress had been made in mitigating risks over time. It had been agreed that a rolling programme to review departmental Risk Registers be continued until after the transition.


·  Emerging Risks - The review of risk was still ongoing but on track to be completed by March 2017. Support Services had recruited eight new members of staff and they would be commencing work in March 2017.


·  Health and Safety - Management Team had agreed that the Corporate Health and Safety Officer be consulted with regard to moving towards agile working but she would be involved further when the other phases were introduced.  She was also temporarily dealing with ‘Events’ as there were no Case Management Officers in set up to administer them at present.


·  Procurement – The Corporate Director – Support Services (CFO) had sought clarification from the Future Eastleigh Board on where the function of Procurement would sit within the new structure.  PEG had acknowledged that this was a weakness within the authority and a huge risk. The Corporate Director – Strategy was to approach Basingstoke and Deane District Council to seek assistance and this would be reported back to the Group as soon as possible.


The Chair thanked Councillor Irish for attending the meeting and reporting back to this Committee.


Action List pdf icon PDF 84 KB

Additional documents:



Forward Plan pdf icon PDF 90 KB


The Committee considered the current Forward Plan of Key Decisions.


It was AGREED -


That the current Forward Plan be noted.


Work Programme pdf icon PDF 179 KB


The Committee considered its current Work Programme and made amendments thereon.


It was AGREED -


That the Work Programme be noted.


Future Eastleigh - Service Redesign and Digital pdf icon PDF 409 KB


Consideration was given to the report of the Interim Corporate Director that explained that, as part of its Future Eastleigh Programme, the Council was redesigning services and utilising digital technology to meet its ambitions to become more efficient.  This in turn would better meet the needs and aspirations of the Council’s communities when there was considerable and increasing pressure to manage with decreasing resources.


The programme of Service Redesign had been phased as detailed below with further information detailing the contents of each phase included within Appendix 1 to this report.



·  Launch phase – Senior Management Structure with the majority appointed September 2016.

·  Phase 1- Strategy and Support Services Directorates appointed to with a ‘go live’ date of 5 December 2016.


Planned(to be implemented incrementally and fully by end December 2017)

·  Phase 2 – Delivery Units (Commercial areas) and Local Area Services

·  Phase 3 – Service Delivery


To date, the programme was on track with Phase 1 completed and Phase 2a underway with recruitment on-going.There had been slippage on Phase 2, the delivery units, due to securing the right professionals for the posts in the commercial area; however the Commercial Manager had been recruited and started that day. The technology development for Phase 2b was moving ahead, but there was a delay in the production of business plans for the commercial areas which were still being refined.  Phase 3 had just started.


A full risk register had been completed for the Service Redesign and Digital Transformation programme and Members were advised that this was regularly reviewed by the project team.  This had also been reviewed by the Strategic Risk Management Group with the Member representative reporting back to this Committee.


There were a number of significant risks, as would be expected in a programme of this significance.  The key risks were summarised as:


·  Delays in implementation affecting the timing of efficiency savings

·  Negative effect on service delivery as staff with knowledge and experience either leave employment or move on to other roles within the Council

·  Technology solution not being fit for purpose

·  New organisational structures not being fit for purpose

·  Efficiencies targets not being achieved


These risks were managed and mitigated, where appropriate, through the Future Eastleigh Board which met monthly, and Future Eastleigh team meetings which met weekly.


In response to questions regarding the risk analysis and the delays in the implementation affecting the timing of efficiency savings, Members were advised that it was not a concern at the moment. There were four sets of business plans for the commercial areas comprising car parks, theatres, Direct Services and Property, and with the turnaround of staff it was important to get the Commercial Manager in place first before taking the plans forward.


With staff leaving or moving to new roles, old jobs were still being undertaken, and one lesson learned from the early phase had been that the training of staff in new processes needed to be carried out further in advance of the launch of each phase.  Furthermore, transition plans for staff moving out of existing roles must be more detailed in future to ensure that all tasks were identified and assigned to teams in the new structures or the processes reviewed and ceased.


Members submitted a plea that any information put on the website be in plain English if possible.


The Chair thanked the Interim Corporate Director for her report and asked that Members be kept informed.


Exempt Business

To consider passing a resolution under Section 100A(4) of the Local Government Act 1972 in respect of the following item of business on the grounds that it is likely to involve the disclosure of exempt information as defined in paragraph   of Part 1 of Schedule 12A of the Act.


The Schedule 12A categories have been amended and are now subject to the public interest test, in accordance with the Freedom of Information Act 2000.  This came into effect on 1 March 2006.


It is considered that the following item is exempt from disclosure and that the public interest in not disclosing the information outweighs the public interest in disclosing the information.




(1)  That, in pursuance of Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it is likely to involve the disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act; and 


(2)  That, in pursuance of the public interest test, the public interest in disclosing the information contained in the following item of business was outweighed by the public interest in maintaining the exemption.


Future Eastleigh - Service Redesign and Digital - Appendix 2


Consideration was given to Appendix 2 to the report.