Meeting documents

Members considered the Internal Audit Outturn and Quality Assurance Review Report presented by Jonathan Tully.

Members asked questions, made comments and received responses as follows:

1. Councillor Booth suggested that with regards to the appendix to the report it would be helpful to have the ratings included; if the ratings were listed against the reviews it would give us assurance. He stated that officers have reported no significant issues, and asked if any issues were identified at all.  Jonathan Tully confirmed that we do pick up on issues for improvements within the teams, although none were significant enough for the overall opinion in this report. Councillor Booth stated that the challenge is, if we are not picking up on any significant issues, are we delving deep enough. Jonathan Tully confirmed that the team do ensure that the assessments are thorough and follow guidelines;


2. Councillor Buckton stated that he is curious about the use of the term 'adequate' as this is not a good term. He asked if 'adequate' is on a sliding scale. Jonathan Tully confirmed that adequate is an assurance rating on a sliding scale, he added that the terminology gets debated quite often, and reassured members that it is a positive term to use in this case.

The Corporate Governance Committee agreed to note:

• The outturn of Internal Audit for 2014/15;


• The Internal Audit Manager opinion on the "adequacy" of internal control;


• The positive outcome of the independent quality assurance review.

Members considered the Annual Governance Statement 2014/15 presented by Jonathan Tully.

Members asked questions, made comments and received responses as follows:

1. Councillor Hay asked for clarification with regards to the Countywide Information Sharing Framework. Jonathan Tully confirmed that The Cambridgeshire Framework encourages Councils, Fire, Police and Health authorities to share information safely and manage risks;


2. Councillor Hay asked for clarification with regards to the Council's Whistleblowing Policy. Jonathan Tully stated that this is a stand-alone policy which is reviewed every year, he explained that we follow the latest guidance from the Whistleblowing Charityy, Public Concern at Work;


3. Councillor Hay asked if this is available on the website. Jonathan Tully explained that there are different avenues to follow depending on the issue being raised, either internal whistleblowing or externally via the 3C's;


4. Councillor Booth stated that the report refers to electing the Leader as an achievement for good governance and that he did not see why it was in there, or if it was to be included we need to explain how it is contributing. Carol Pilson stated that it is a good point and maybe we can reflect on the wording. She explained that the opposite is that we do not have a Leader and that can destabilise an organisation. The fact that we can elect a Leader demonstrates that good decision making can continue;


5. Councillor Booth stated that some wording should also be added to the reference to CNC Partnership too. Carol Pilson agreed;


6. Councillor Buckton stated that the report contains lots of information about lots of different things, but there is very little information with regards to consulting and suggested that some further explanation be included. Carol Pilson agreed to add some more information in future to clarify consultation activities and how our CSE accreditation includes consulting with the public;


7. Councillor Booth stated that in some cases there is a statutory duty to consult; he suggested that it is worth pointing out where we have a statutory duty or non-statutory duty to consult. Carol Pilson agreed to include this in the report in the future;


8. Councillor Hay asked why the Council are changing their auditors, is this driven by cost. Rob Bridge stated that driven by the Audit Commission changes. Government felt that following the first role of procurement of auditors, which drove down the cost so much, they would bring forward the next round of tenders, this round included FDC. He confirmed that the costs have been decreasing anyway but this will make it even more competitive. He stated that it will be interesting to see what comes out over the next year or so and how the tender process progresses in future;


9. Councillor Boden stated that he was surprised to see the breach of the prudential indicators and asked for clarification. Rob Bridge confirmed that it would be the responsibility of this Committee to decide if it should be included in the AGS.  However, he added that the auditors are happy with the way that this has been recorded and have accepted it. It is covered in the Treasury Management Report and he feels it is not a significant risk. He stated that if Councillor Boden feels that it should be incorporated a further discussion would need to take place. Councillor Boden stated that he is not sure what the risk is and that is why he is raising the point. Rob Bridge stated that the risk is small he confirmed that the way the treasury management is managed changed following the Icelandic banking issues. PwC have never raised this, but he is aware that we have a change of auditors approaching and they might raise it in the future. Mark Saunders stated that the risk is mitigated as we have the money to pay off the debt, but it is not financially viable at this time. Rob Bridge confirmed that this is reviewed frequently but the penalties are currently too high to consider paying it off;


10. Councillor Tanfield asked as Councillor Boden is concerned, is this something that the Committee need to investigate further;


11. Councillor Owen stated that this is something that we have discussed from time to time before and it has been agreed that it is not worth paying off when there are such high penalties to do so;


12. Councillor Hay agreed and stated that as long at the reserves to pay it are in place she does not see that this is a problem;


13. Councillor Booth confirmed that this has been discussed previously, he asked officers to clarify that the reserves are ring-fenced and cannot be used for anything else. Mark Saunders confirmed that the reserves are ring-fenced;


14. Councillor Owen confirmed that the circumstances are not right at this moment in time to pay these due to the interest rates. Mark Saunders confirmed that this is a very unusual situation but agreed that to repay now would cost the Council money, it is just the way that the market and economy is at the moment.

The Corporate Governance Committee agreed to approve the content of the Annual Governance Statement for inclusion in the Council's published Statement of Accounts 2014/15.

Members considered the Statement of Accounts 2014/15 presented by Mark Saunders.

Members asked questions, made comments and received responses as follows:

1. Councillor Hay asked why there is such a difference between the planning income and expenditure. Mark Saunders stated that the term 'Planning Services' covers many service areas not just planning such as planning policy, conservation, building control, planning service, compliance, enforcement and the technical team, however it is just the planning service and building control that raise any income. Rob Bridge confirmed that during the next 12 months members will decide if we will start to charge for pre-applications too;


2. Councillor Hay asked for clarification with regards to loans to private individuals, are these loans to staff? Mark Saunders stated that these are from an option to offer loans on top of private sector renewal grants. Rob Bridge confirmed that these loans are at nil interest and form a charge on the individual's properties;


3. Councillor Booth stated that with regards to fees, charges and income, there are a number of services running at a loss. He added that he recalls suggesting previously that we should ensure that the Overview and Scrutiny Panel are aware of this information when it comes to setting fees and charges as they see a report in a different format. Rob Bridge agreed that the information can be incorporated into the report to Overview and Scrutiny;


4. Councillor Owen asked for clarification with regards to market fees. Mark Saunders stated that we did some reorganisation of the market teams which has realised a saving, but it is one of the areas that if you were to charge what it costs it would put people off;


5. Councillor Hay stated that the report shows VAT payable as an expense and asked for clarification of this. Mark Saunders stated that most of the VAT payable is not a cost to the authority, but that item is there just to catch any items of expenditure that we cannot recover the VAT for;


6. Councillor Boden asked how close to the 5% partial exemption we are. Mark Saunders confirmed that we are quite close to it, he added that we declared a breach last year and repaid it but when it was checked and adjusted it was paid back to us. He stated that what causes the main issues are the leisure activities and the mini-factories, there are a number of the mini-factories that are still VAT exempt;


7. Councillor Boden asked if it was possible to ensure that internal audit take a look at this. Rob Bridge confirmed that this is already something that they look at;


8. Councillor Boden asked for clarification with regards to the Investment Property figures in the report; there have been no additions or disposals just revaluations. Mark Saunders confirmed that this was correct;


9. Councillor Boden stated that in what has been a good year for the commercial property market, there has been an increase of 0.5 - 1% increase. Mark Saunders stated that the properties and pieces of land that we have rented out, when the lease comes up again they are renewed.  Councillor Boden stated that on that basis the performance seems to be poor and these numbers are not what I would have expected. Mark Saunders stated that the valuations are carried out by an independent valuer, and the valuations are checked by the auditor. Rob Bridge stated that developers and agents are struggling to get the value of land, the valuations in Fenland are not the same as other parts of Cambridgeshire, he added that we would all love to see the value in Fenland increasing;


10. Councillor Boden stated that with reference to the provision for non-payment of council tax, the report shows that the provision for doubtful debts has gone up in the last 2 years, he added that either we are in a worse position than we were or are not writing off these debts.  Mark Saunders stated that the local council tax support scheme changes mean that people now have to contribute something towards their council tax, we have to make adequate provision for this and justify our actions with the auditors. He added that the write off's during the year, and from year to year, fluctuates for various reasons. Rob Bridge stated that the council tax support scheme is the key policy driver, in the first year of that scheme we offered transition relief but now that stands at 14%;


11. Councillor Boden asked for clarification with regards to the 99% assumed collection rate and asked if maybe the figure is too challenging. Mark Saunders stated that this figure is looked at and assessed every year, there are a number of criteria to investigate;


12. Councillor Mrs Newell asked for clarification with regards to a rogue landlord grant. Rob Bridge confirmed that this is money from the government for Operation Pheasant and Operation Endeavour;


13. Councillor Booth stated that it would be useful if the report referred to the Pension Liabilities increase over 3 years. Rob Bridge confirmed that the increases are annual;


14. Councillor Booth asked for clarification with regards to the cost of appeals for Business Rates Retention Scheme Appeals. Rob Bridge confirmed that the costing is within the budget report and outturn report, and is currently the biggest risk to us. We had an enormous amount of appeals and this affected the end of year position. He added that this is an incredibly complex area and is going to be one of ongoing challenges. 

The Corporate Governance Committee noted the contents of the draft Statement of Accounts for the financial year ended 31 March 2015.

Members considered the Corporate Governance Committee Annual Report presented by Rob Bridge.

The Corporate Governance Committee agreed the Corporate Governance Committee Annual Report for 2014/15 to be forwarded to Full Council.

Members considered the Treasury Management Annual Report 2014/15 presented by Mark Saunders.

Members asked questions, made comments and received responses as follows:

1. Councillor Boden stated that he is surprised that the internally managed funds are not comparable, in the report, against other local authorities as this would be more appropriate. Mark Saunders confirmed that this is what is advised by the Treasury Management Advisors, we have followed the process that they set out;


2. Councillor Boden stated that if we had that information with regards to other local authorities it would demonstrate if we are doing as well as them. Rob Bridge confirmed that he could talk to colleagues in other local authorities;


3. Councillor Booth asked about the number of counterparties on the list that we can actually invest in. Mark Saunders confirmed that it has increased very slightly;


4. Councillor Boden stated that he would be happy to discuss the matter of counterparties after the meeting. Rob Bridge stated that the direction we take as an authority is safe investment, he suggested that if members would like to have a discussion following the meeting then the Portfolio for Finance and Mark Saunders and himself are involved;


5. Councillor Booth stated that we have a very stringent list, there are others that you could invest with if you had a broader base to work with and therefore see better returns.

The Corporate Governance Committee noted the Treasury Management Annual Report 2014/15.

Members considered the Update to the Code of Procurement presented by Rob Bridge.

Members asked questions, made comments and received responses as follows:

1. Councillor Hay asked for clarification of wording removed with regards to the Restricted Procedure tendering process at 4.6.2. Mark Saunders confirmed that this only applied to contracts below the EU Thresholds;


2. Councillor Booth expressed a concern that the change from Cabinet to Portfolio Holder with regards to suspending formal tendering procedures, might mean the decision is not available for public scrutiny. Rob Bridge confirmed that Portfolio Holder Decisions are published on the website;


3. Councillor Boden - I am grateful that the change will be noted as we do not know what the new threshold figures will be, could we be specific and say until 31 December 2015 so that it is clear. Rob Bridge agreed to make the changes;


4. Councillor Hay asked for clarification with regards to the removal of 'Regardless of any exemption, at least two permanent Fenland DC employee signatures must appear on payment slip administration'. Rob Bridge confirmed that this deletion reflects the changes within our financial system processes.

The Corporate Governance Committee agreed the updated Code of Procurement and recommended it to Council for adoption subject to amendments discussed above.

Members considered the Confidential Risk Based Verification Policy Report presented by Adrian Mills (Strategic Manager - Benefits ARP) and Geoff Kent (Head of Customer Services).

The Corporate Governance Committee agreed to:

• note the contents of the confidential report;


• approve that the Council adopts the Risk Based Verification Policy to be effective from 1 August 2015.