Agenda and minutes

To confirm and sign the minutes of 27 July 2018.

The minutes of the meeting 27 July 2018 were confirmed and signed subject to the following comments;

1.    Councillor Booth said in relation to minute CGC13/18, the intention was that officers would report their findings on FACT back to the Corporate Governance Committee and not just the Chairman. Councillor Clark confirmed that there was an update for members that would be provided under ‘Agenda Item 8 – Items of Topical Interest’.

To receive the independent external auditors, Ernst &Young (EY), Annual Audit Letter for 2017/18.

Members considered the Annual Audit Letter 2017/18 report, presented by Kamal Mehta.

Councillor Clark introduced Mark Hodgson from Ernst & Young (EY) to members. Mark Hodgson confirmed that Neil Harris had moved to another area within the company and explained that he would now be the Council’s External Auditor and will be attending future meetings. He said he was looking forward to working with members over the coming years.

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

1.    Councillor Clark asked if Flo Barrett and Amalia Valdez Herrera from EY would still be assisting with the Council’s audit. Mark Hodgson explained that Flo Barrett is relocating due to a career opportunity however Amalia Valdez Herrera would continue working on the Council’s audit.

2.    Councillor Hodgson asked if information should be included in the report in relation to the new Leisure Centre contract with Freedom Leisure. Mark Hodgson confirmed that the current audit reports a valuation of the Leisure Centres as of 31 March 2018 and as the transfer to Freedom Leisure will not take place until December 2018, this will form part of the audit plan for 2018/19.

3.    Councillor Booth highlighted that the valuation of the Leisure Centres should remain fairly static as the Council are still retaining ownership of them. He added that Freedom Leisure are intending to improve and invest in the Leisure Centres which may make a nominal difference to the valuation. Mark Hodgson agreed that this is EY’s working assumption and the effect of this will depend on Freedom Leisure’s capital input into the centres as to whether this will affect the value of the physical assets.

4.    Councillor Clark asked if the Council’s asset could increase in value if Freedom Leisure decides to improve the Leisure Centres. Mark Saunders said this would be dependent on the type of improvements they choose to undertake. Councillor Booth highlighted that this will depend on the agreement the Council have with Freedom Leisure in relation to the ownership of any new assets.

5.    Kamal Mehta confirmed that any improvement on the physical structure of the Leisure Centres would be reported on the Council’s balance sheets, as the Council have retained ownership.

6.    Councillor Sutton asked for further information on the presentational and disclosure issues referenced on page 25 of the Agenda Pack. Mark Saunders highlighted that members were provided with an explanation regarding these at the Corporate Governance meeting on 27 July 2018. Councillor Booth added that as they were under the threshold for reporting it was not necessary to include them in the report.

7.    Mark Hodgson confirmed that the reference in the Annual Audit Letter to presentational and disclosure issues which have been adjusted by management, not being detailed in EY’s report related to non-monetary disclosures.

8.    Councillor Booth asked if the audit fees charged by EY will change in light of the recent staffing changes. Mark Hodgson confirmed that the fees are set by the regulator and any staffing changes within EY will not  ...  view the full minutes text for item CGC18/18

The purpose of this report is to review the Council’s Treasury Management activity for the first six months of 2018/19 and to provide members with an update on matters pertinent to future updates to the Council’s Treasury Management Strategy.

Members considered the Treasury Management Strategy Statement and Annual Investment Strategy Mid-Year Review 2018/19 report, presented by Kamal Mehta.

In relation to the Council not meeting the Debt/Operational Boundary indicator as highlighted in the report, Kamal Mehta explained that this is because the Council would incur a significant cost if they were to redeem the debt which would not be advantageous. He confirmed that EY are aware of this and the Treasury Management Consultants keep this under-review at all times. If the opportunity arises to repay this at a competitive cost and the Council have the resources to do this however looking at the market rates currently, this is unlikely in the near future.

Kamal Mehta confirmed that overall the Council is performing well and is working hard to achieve as high an interest rate as possible on deposits. He confirmed that the Council is on target to achieve the Budget in relation to this.

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

1.    Councillor Clark asked for further information in relation to 6.2 on page 48 of the Agenda Pack. Kamal Mehta explained that as part of the capital programme requirements, the Council was required to fund a certain level of the capital programme from borrowing, as the Council’s own resources could not be used. This amounted to £1.003m of borrowing and the use of lease facilities totalling £0.336m to support capital investment in 2018/19. These decisions are made during the assessment of the Council’s funding arrangements at the end of the financial year when all capital expenditure is considered. He explained that this is the responsibility of the Council’s Section 151 officer and they consider the best optimal mix of funding and financing of the Capital Programme to ensure the optimisation of the Council’s resources is correct.

2.    Councillor Clark asked for further information on the lease facilities discussed in 6.2 of the report. Kamal Mehta explained that this is when the Council purchase a piece of equipment and decide to fund it through a lease arrangement with an external funder as oppose to purchasing the equipment outright. Mark Saunders confirmed that when this situation arises, a full assessment is carried out to ensure that leasing the equipment is the best option for the Council.

3.    Councillor Murphy agreed and said consideration is given to each case as to whether it is best for the Council to purchase a piece of equipment or lease it.

The Corporate Governance Committee noted the Treasury Management Strategy Statement and Annual Investment Strategy Mid-Year Review 2018/19 report.

(Councillor Booth declared an interest as the Council hold investments with building societies and he is an employee of the Yorkshire Building Society. Councillor Booth left the room for the duration of this Item)

To report progress against the Internal Audit Plan 2018-19 for the period 01 April 2018 including planned work until 30 September 2018 and the resulting level of assurance.      

Members considered the Internal Audit Plan 2018-19 Progress Report Q2 presented by Kathy Woodward.

Kathy Woodward explained that the overdue recommendations shown in Appendix B on page 58 of the Agenda Pack may look high however the figures include audits carried out on behalf of Anglia Revenues Partnership (ARP) as a collective audit of seven local authorities. One of the high outstanding recommendations relate to the ARP audits and fifteen of the medium recommendations too. In relation to Fenland District Council, there was one high recommendation and nine medium recommendations outstanding however as of today, there are now only two overdue medium recommendations. She confirmed that these would be reflected in the next progress report.

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

1.    Councillor Booth asked for further information on the ‘Street Scene – Enforcement’ audit and the ‘Corporate Assurance – Transparency’ audit referenced in Appendix A on page 55 of the Agenda Pack. Kathy Woodward confirmed that the medium enforcement recommendation relates to the monitoring and flow of information the Council has with their Contractor. Work is ongoing in ensuring procedures are in place for this. In regards to the recommendation on transparency, this relates to responsibility and ownership of keeping information on the website up to date.

2.    Councillor Booth asked if the outdated information found on the website was information that the Council has a statutory duty to publish. Kathy Woodward confirmed that it related to statistics the Council must publish and these have now been reviewed and updated.

3.    Councillor Booth asked if Kathy Woodward was confident that a governance process was in place to ensure the website is updated regularly and to avoid this issue happening again. Kathy Woodward said that one of the recommendations made was to ensure ownership is taken of this task and confirmed that this is now in place.

4.    In relation to the Conduct Hearing on 31 October 2018, Councillor Booth asked for confirmation that the internal audit team had no concerns or recommendations in relation to Members Expenses and asked how members can be assured that this issue will not happen again. Kathy Woodward said that in light of the Conduct Hearing and the press surrounding this, she had extended the sampling size when she audited this area and confirmed that sufficient processes are in place to prevent this issue reoccurring in the future. She added that the test samples had satisfied her criteria and is confident that the procedures in place are being strictly adhered to by officers processing claims.

5.    Councillor Booth asked if Kathy Woodward believed that the complaint dealt with at the Conduct Hearing on 31 October 2018 was an isolated incident. Kathy Woodward confirmed that she did.

6.    Anna Goodall explained that it is each member’s responsibility to ensure the accuracy of the claims submitted to Member Services for processing however, in light of recent events the process has had to change and a more proactive stance has been taken in  ...  view the full minutes text for item CGC20/18

To provide a quarterly update to the Corporate Governance Committee on the Council’s Corporate Risk Register.

Members considered the Corporate Risk Register quarterly review report, presented by Anna Goodall.

Anna Goodall highlighted to members that there are no new risks to report however provided information on a number of comments and progress actions that have changed within the report.

Anna Goodall explained that in relation to Risk 2 – Brexit (page 65 of the Agenda Pack); there is still a large amount of uncertainty surrounding the risk Brexit may bring to the Council. She confirmed that the Council are working as part of a Cambridgeshire-wide group assessing the impact of a ‘no deal’ Brexit on the district. She explained that the group’s lead authority is the Fire Service and members would be provided with updates on their findings accordingly. She informed members that the Council’s Interim Monitoring Officer is currently working on a document that will explain the key issues Brexit may affect within the Fenland area.

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

1.    Councillor Booth said whilst he was pleased with the format of the report, there still appears to be confusion surrounding the difference between actions and mitigation. Anna Goodall noted this.

2.    Councillor Booth asked what the abbreviation MTSP meant as shown on page 81 of the Agenda Pack. Anna Goodall explained that this referred to Management, Trade Union & Staff Partnership which has replaced Staff Side within the Council.

3.    Councillor Sutton asked if the list provided (page 65 of the Agenda Pack) is a full list of the risks within the Council. Anna Goodall confirmed that this was a complete list of the risks at a corporate level. Councillor Booth confirmed that the lower risks within the Council, do not feed in to this report.

4.    Councillor Sutton asked for further information on how risks are assessed within individual service areas. For example, within the Planning service there is a financial risk to the Council in relation to decisions made by the Planning Inspectorate and asked how this would this be assessed and monitored. Anna Goodall confirmed that all service areas have their own service plan and associated Risk Register therefore, in this instance; this risk would be captured in these documents.

5.    Kamal Mehta explained that in reference to Councillor Sutton’s point, fines issued by the Planning Inspectorate can sometimes be a result of members of the Planning Committee going against officer’s recommendation. To prevent this, the Council provides planning training to members to give clear guidance and advice in relation to this and the financial implications to the Council.

6.    Councillor Booth asked why the Fire Service was the lead authority for the area’s Brexit focus group. Kamal Mehta confirmed that this had been initiated by Central Government to ensure that suitable arrangements are in place within the Emergency Services if a ‘no deal’ Brexit causes civil unrest within the UK. 

7.    Councillor Booth asked if there have been any changes in Local Government Legislation or advice released on the impact of Brexit. Kamal Mehta confirmed  ...  view the full minutes text for item CGC21/18

At the 27 July 2018 Corporate Governance meeting, members had asked questions surrounding assurances that needed to be provided in relation to the payments the Council make to FACT, following on from the Cambridgeshire County Council review.

The meeting was adjourned at 3:47 PM to allow members to read the report.

The meeting reconvened at 3.59 PM.

Kathy Woodward presented members with a report updating them on work undertaken by the Council in relation to their concerns. She explained that the report released by Cambridgeshire County Council( CCC) had been reviewed by the Chief Executive, Corporate Director, Section 151 officer, Internal Audit Manager, Head of Legal Services and Transport Manager. The group focused on the outcome of the PKF investigation commissioned by CCC and the implications to Fenland District Council and as a result, conducted a review of certain elements as documented in the report. She confirmed that the Council’s Management Team had agreed with the recommendations made in the report.

Councillor Clark thanked Kathy Woodward and officers for their work on this.

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

1.    Councillor Booth stated that there are other car-share schemes and providers available locally. Kathy Woodward clarified that car-share schemes are classed as social travel which is different to the Dial-A-Ride scheme therefore FACT are the only provider of this in the district.

2.    Councillor Booth asked if the Council are paying for legal advice in relation to this matter. Kathy Woodward confirmed that they are not.

3.    Councillor Booth stated that a review of this should not take place as part of the next Comprehensive Spending Review (CSR) as this may not take place soon enough. He asked if the review could take place after the Service Level Agreement (SLA) review next year. Councillor Clark agreed with Councillor Booth.

4.    Councillor Sutton agreed and highlighted that there may not be a CSR next year and requested that a standalone review is carried out on this item. Kathy Woodward confirmed that the SLA review is due to take place after 31 March 2019.

5.    Councillor Murphy agreed, as waiting for the next CSR may take too long.

6.    Councillor Booth asked if the Council’s Internal Audit team could verify the accuracy of the journeys FACT claim for, with the individual users of the service. Kathy Woodward explained that contacting the individual users would be outside of the Internal Audit Team’s normal remit.

7.    Councillor Butcher said the Dial-A-Ride journeys are not recorded in the same way as journeys requiring bus passes. Councillor Booth said the journeys must be recorded as users are required to call and book them with FACT and FACT claim the money back via the Council.

8.    Councillor Booth said members require an added level of assurance that the journeys being claimed for by FACT are genuine. Kathy Woodward explained that she had considered attempting to validate these figures by observing actual journeys taking place on buses however this would take up the Council’s  ...  view the full minutes text for item CGC22/18