Agenda and minutes

The Chair will draw attention to the emergency evacuation procedure as set out under Note 7.

The Democratic Services Officer advised the meeting of the procedure.

RESOLVED that a Vice-Chair was not required on this occasion.

Apologies were received from Cllr Chris Dando and Cllr Andrew Furse. Cllr Richard Samuel substituted for Cllr Furse.

At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:

(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest,  (as defined in Part 2, A and B of the Code of Conduct and Rules for Registration of Interests)

Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officeror a member of his staff before the meeting to expedite dealing with the item during the meeting.

There were none.

The Chair reported that this was the last meeting of the Committee that Mr Henderson would attend. Members thanked him for the work he had done on behalf of the Council and wished him well for the future.

There were none.

There were none.

These were approved as a correct record and signed by the Chair.

The Divisional Director – Customer Services presented the report.

He said that the amount of Housing Benefit paid out was reducing as working age claimants were moved on to Universal Credit. However, it was estimated that £38.8m would still be paid out in Housing Benefit this year. Housing Benefit was a complex area; the Government had already issued seven circulars this year changing the rules. At one point last year it did seem that Bath and North East Somerset would exceed the LA error threshold and lose subsidy. This was because the Council’s document management system had been changed, and evidence could not be produced to substantiate a number of original claims. However, subsequent work done with the DWP and the Council was able to show that though some original records were not available, this did not cast doubt on the accuracy of the claims, so the Council remained under the threshold.

He outlined the safeguards implemented to reduce the risk of subsidy loss through errors in future. These are detailed in section 5 of the report. He could not give assurance that the issues had been fully resolved, but measures had been put in place to make errors less likely. The administration of Housing Benefits would remain a risk to the Council: Housing Benefit administration was not a career that most new Council employees would wish to follow, and it was not known when migration to Universal Credit would be completed.

A Member noted the statement in the Divisional Director’s letter to DWP (agenda pages 17-18) that only one of the undocumented claims would have resulted in an error. He suggested that it was hardly worth worrying about such a tiny amount. Mr Morris replied that the external auditors had extrapolated a sum for overpayments and underpayments based on sample testing. The Member replied that he remained concerned about the amount of time and effort expended to identify such small errors.

A Member said that he believed at this time of unprecedented financial stringency the Council should take the possible loss of subsidy very seriously. The Divisional Director of Customer Services agreed. A lot of work was being done to identify overpayment of Housing Benefit and underpayment of subsidy. The Council is able to recover overpayments. The Council’s Housing Benefit system had been overhauled and staff from other Councils came to see how it had been done. It was recognised that some claimants had difficulties with completing online forms. Some returned paper forms late. A lot of time was spent with claimants at the front end to ensure that the Council had correct information.

A Member asked about staff training and the input of DWP into training. The Divisional Director of Customer Services replied that the service had a dedicated training officer, and there were also a number of experts within the team, so a lot of training was designed in house. Other Councils had been interested in the training provided by B&NES. Mr Henderson had provided training  ...  view the full minutes text for item 154.

The Head of Corporate Finance gave a presentation on the structure of the 2016/17 accounts and future changes. A copy of his PowerPoint slides is attached as an appendix to these minutes.

The Head of Audit West presented the Annual Governance Statement 2016/17 (agenda pages 192-201), which forms part of the Annual Statement of Accounts. The financial challenge (pages 200-201) would remain the significant governance issue for the Council.

Mr Morris and Mr Henderson presented the audit findings report for the Council. There were no significant issues arising from the audit and an unqualified opinion had been given. All papers were up to a reasonable standard. He commended officers for achieving this on the new accelerated timetable for producing the accounts. The audit could not be formally concluded and an audit certificate issued until work necessary to issue the Whole of Government Accounts Component Assurance statement for the Authority for the year ended 31 March 2017 had been completed and until the final version of the Pension Fund Annual Report had been reviewed, as mentioned below.

In reply to a question from a Member about continuing financial pressures, the Divisional Director – Business Support replied that a budget monitoring report and a new medium-term financial strategy looking five years ahead would be presented to the Cabinet in October. It was certain that the financial challenge would not lessen any time soon.

The Chair asked whether it was normal for third parties not to respond to requests from the external auditors (issue 5 on agenda page 37 “confirmation requests from third parties”). Mr Morris replied that difficulties with some third parties had year. Responses had been chased up, but some had still not responded in time, so alternative procedures had been undertaken to achieve assurance as stated in commentary to that item. Mr Henderson said that the third parties who had been slow to respond included other local authorities.

The Chair asked whether the forthcoming changes to data protection regulations would affect the external auditor’s access to information. Mr Morris said they would be compliant, as they had robust confidentiality protection in place on all their systems and he did not envisage that there would be any impact on their audits.

The Chair asked about progress with action 2 on agenda page 52 (review of number of administrative staff and maintenance of separation of duty principles. The Divisional Director – Business Support said this action required consultation with the relevant managers. She noted that implementation of this was not required until November. She said she would check the position and report back.

Mr Morris presented the audit findings for the Avon Pension Fund. He drew attention to the finding that employee contribution banding rates were being incorrectly applied in one organisation. The Pension Fund Annual Report is not required to be published until 1^st December. The external auditors had been provided with the draft report and had found no material inconsistencies between it and the audited financial statements. However, the  ...  view the full minutes text for item 155.

The Head of Corporate Finance presented the report. He reminded Members that this report had already been considered by Full Council on 13^th July 2017 and was being brought to the Committee because of its scrutiny function.

Members asked questions and commented on the report.

After discussion it was RESOLVED:

1. to note the 2016/17 Treasury Management Report to 31^st March 2017, prepared in accordance with the CIPFA Treasury Code of Practice;

2. to note the 2016/17 Treasury Management Indicators.

The Head of Audit West presented the report.

A Member said that it would have been helpful if the revised code could have shown the differences from the previous version.

A Member noted that recently a complex arrangement had been proposed to create a holding company between the Council and its trading companies. This structure would place all power in holding company into the hands of Executive Members and Officers. There would be absolutely no involvement of opposition parties. The proposal had not come to the Corporate Audit Committee, even though the holding company would control a large part of the Council’s expenditure. He could not see how this could be reconciled with the aim in the third bullet point on agenda page 234 that there should be “clear accountability for the use of those resources in order to achieve desired outcomes for service users and communities”. The Head of Audit West replied that the holding company proposal did not fall directly within the terms of reference of the Corporate Audit Committee. As he understood the proposal, it was not about creating companies, but about exercising control over the activities of the Council’s trading companies. The Local Code of Corporate Governance was about the principles the Council and its contractors should be applying in their activities. Another Member pointed out that the Local Code of Corporate Governance would apply to the holding company, which would be part of the Council.

RESOLVED to recommend the revised Local Code of Corporate Governance for adoption by full Council at its next formal review of the Constitution.

The Head of Audit West presented the report. He reminded Members that the Council, like the vast majority of Councils, had opted into the Public Sector Audits Appointments Limited auditor appointment arrangements. PSAA had recently written to the Council that following a procurement process it proposed to appoint the existing Council’s existing auditor, Grant Thornton, as the Council’s auditor for a period of five years from
April 2018. The Council’s S151 Officer had been asked to confirm the appointment by 22 September 2017. The Committee was invited to support the proposal.

RESOLVED to support the recommended option for the future procurement of External Auditors to the Council by PSAA Ltd.