Agenda and minutes

To approve the minutes of the meeting held on Monday 13 January 2020 as an accurate record.

The minutes of the meeting held on Monday 13 January 2020 were agreed as an accurate record.

In accordance with the Council’s Code of Conduct and the statutory provisions of the Localism Act, Members and co-opted Members of the Council are reminded that it is a requirement to register disclosable pecuniary interests (DPIs) and gifts and hospitality to the value of which exceeds £50 or multiple gifts and/or instances of hospitality with a cumulative value of £50 or more when received from a single donor within a rolling twelve month period. In addition, Members and co-opted Members are reminded that unless their disclosable pecuniary interest is registered on the register of interests or is the subject of a pending notification to the Monitoring Officer, they are required to disclose those disclosable pecuniary interests at the meeting. This should be done by completing the Disclosure of Interest form and handing it to the Democratic Services representative at the start of the meeting. The Chair will then invite Members to make their disclosure orally at the commencement of Agenda item 3. Completed disclosure forms will be provided to the Monitoring Officer for inclusion on the Register of Members’ Interests.

There were none.

To receive notice of any business not on the agenda which in the opinion of the Chair, by reason of special circumstances, be considered as a matter of urgency.

There were no items of urgent business.

To receive the Audit Plan for 2019/2020.

Lead officers from Grant Thornton spoke to the report of the Audit External Plan and summarised the planned work to undertake before issuing the opinion.

The significant risks were explained. The main subsidiary was the brick by brick company, and audit approach was explained. Officers informed that the service were able to rebut the revenue recognition; and officers noted that the material level had also been reduced.

In relation to value for money, officers noted the significant risks on financial sustainability following last year’s adverse conclusion, the previous Ofsted Inspection assessment and Governance of the Authority’s Alternative Delivery Models.

Members noted that the Ofsted’s recent inspection for the local authority was rated “Good” which was a remarkable turnaround from the inadequate rating in previous years.

In response to Members questions relating to Covid-19, officers informed there were a number of identified issues that impact on the audit and that the Council took responsibility to continue to provide services to the community. Further, there were a lot of uncertainties in meeting deadlines, as the CLG’s government statement detailed had moved to later in the year for auditing due to the unusual situation.

In response to Members questions relating to the clarity in the timing of the audits, officers commented that they would be required to re-arrange their planning which would depend on sickness levels both in the finance and audit teams, and they were working to meet the revised statutory deadlines.

Officers referred to the External Audit Plan for Pension Fund report which mirrored the External Audit Plan report. The significant risks identified (in page 37 of the agenda) and value for money conclusion did not apply to the Pension Fund.

The Committee RESOLVED to agree the reports.

To receive the Housing Benefit Subsidy Claim Audit 2018/2019.

Officers present spoke to the Mazar report which was appointed in 2018/19. The process set out was issued by pensions.

Officers informed in summary that the housing benefit audit was worth £167 million.

In quality assuring their work, officers conducted a random sub-testing including additional testing from previous audit. In the cases tested, of the random sample, no errors were found; though they had identified some errors in the additional testing. The issues were within the housing revenue account, where there were classification of over payment system issues:

-       The value of the overstated overpayments identified was £2,237.

-       There was also an over payment to a value of £408. This has since been rectified.

-       In one case, earned income was incorrect in determining housing benefit. This was to the value of £279. There were £23000 less in reclassifying payments. The department had received £2000 in more subsidy.

In response to Members question relating to the money paid out and subsidy, officers informed that where they had paid supported residences, they received a certain amount. The amount of subsidy loss where they could not claim balance was between £1.5 and £2 million in any one year, which was quite substantial.

The Chair suggested for the subsidy to be changed to clarify correctly.

The Committee RESOLVED to note the report.

The report of the Internal Audit Charter, Strategy and the Plan of audit work for 2020/21 is attached.

The Head of Audit spoke to the report. The Charter and Strategy were unchanged from last year.

The officer referred to appendix three in the report which was the proposed plan of work for next year.

In response to questions raised by Members relating to a recent internal case of fraud, officers informed that the case was investigated by the Fraud Team and audits were conducted subsequently. Officers were satisfied that the controls were now being operated properly.

In response to questions raised by Members relating to payments which were shown as corporate risk audits (in page 67 of the agenda), specifically ad hoc payments, officers informed that the normal approach was for a supplier to be set up and to receive an invoice. It was noted that this was not always possible and there were a number of payments which had been made in a different way. Following the changes to “My Resources”, the new finance system, in May 2019, payments were working better. In addition the ad hoc payments concept was a new facility and officers wanted to be sure it was working correctly.

The Committee RESOLVED to:

§  Approve the Internal Audit, Charter, Strategy and the plan of audit work for 2020/21.

This report details the work completed by Internal Audit so far during 2019/20 and the progress made in implementing agreed actions from audits completed in previous years.

The Head of Audit spoke to the report and highlighted the progress and summary of the findings.

The officer highlighted that 50% of the individual reports had received limited assurance, which was likely a result of the constraints within the organisation and was the continuation of a trend over recent years.

The progress against the audit plan in detail highlighted that in terms of managing expectation, Mazars (who deliver’s Croydon Council’s internal work) informed that their staff was not to work in client sites, thus contact would be continued remotely, which would make planning and other continued work difficult and may not be finished by the end of the year due to the current pandemic.

In response to Members questions relating to business continuity in the height of covid-19 and working off site, officers informed that there was opportunity for colleagues to work remotely as work consisted of verbal communication and providing evidence which could be done remotely with Council equipment provided.

In response to Members questions relating to the focus on outstanding priority one recommendation, officers noted that following the last committee meeting, the updated priority one recommendations were circulated and advised that there was a role for the committee Members to ask senior officers why actions had not been implemented, as this was deemed important.

The Committee RESOLVED to:

§  Note the Internal Audit Report for April 2019 to January 2020.

This report details the performance of the Council’s Corporate Anti-Fraud Team (CAFT) and includes details of the team’s performance together with an update on developments during the period 1 April 2019 – 31 January 2020.

The Head of Audit spoke to the report of the Anti-Fraud, and specifically brought attention to Table 1 and 2 in the report.

Members heard that Table one had shown the year target achieved for a successful outcome and over payments, and the breakdown of this was shown in Table two.

Further, the report had presented work on the National Fraud Initiative, which was a two year cycle. £167k had already been identified and awaiting recovery. Two areas noted were (1) the DWP death list, where spending continued to be paid out to those in residential care after the service user had passed away and services were not informed. This recovered £93,511 of funds; and (2) the Blue Badge disable parking permits with the DWP National list of deaths. Though payments were still in circulation this has been cancelled.

In response to Members questions relating to whether there was a criteria in receiving information, officers addressed that information on this matter were normally shared after the matter has been closed, or payment has been made. Further, officers highlighted that with identified cases, officers would contact the provider to arrange for cases, though it may not necessary relate to a fraudulent case, it would still be one that would come to the services’ attention. The process was not robust, but once identified money was retrieved.

The Committee RESOLVED to:

§  Note the Anti-fraud activity of the Corporate Anti-Fraud Team for the period 1 April 2019 – 31 January 2020.

The report updates the General Purposes & Audit Committee Members on the corporate risk register (the register) as at 17 March 2020.

The Head of Risk & Corporate Programme Officer presented the risk register report to Members.

Officers highlighted the regular red risk report, and noted that the Ofsted risk was overcome with the service achieving a ‘good’ outcome. This would move the service to a sustainably good journey.

Officers also noted the rise of the covid-19 and the impact it would have in the borough.

The Chair mentioned that the Committee was pleased to see the report from Ofsted with a ‘good’ outcome, and was looking forward to the service becoming excellent. The Members thanked the officers for all of their hard work in a reasonable time and the feedback in the report that was deserved.

Councillor Hall recognised the need to sustain improvement in Ofsted and wanted to reassure that this was the intended objective. Further comments relating to the coronavirus, Councillor Hall mentioned that this risk was clearly high. It was noted that business continuity and after things had been announced in terms of making sure that we were making whole financially to help the borough and maintain services and support. We have been told that extra costs incurred, school closures, outreach services, extra pressures in audit social care council tax etc. can impact on the council financially. There was a huge amount of work around this. Further, in relation to the Brexit risk, whilst the country was focusing on the current pandemic, on the 31st September 2020 there was a risk of a hard Brexit.

The Committee RESOLVED to:

§  Note the contents of the corporate risk register as at 17 March 2020.

The General Purposes and Audit Committee Annual Report 2019-2020 is attached.

The Chair introduced the item and informed the Committee of the General Purpose and Audit Committee Draft Annual Report, which provided details of the Committee’s role.

The report was drafted in accordance with the Constitution and needed to go to Full Council for consideration.

The Committee discussed the report highlighting that there was opportunity to update the report given the current circumstances and things touched upon.

The Committee RESOLVED to:

§  Approve the General Purposes and Audit Committee Annual Report 2019-2020.

This report identifies the recommended candidate to be appointed as an independent non-voting co-opted Member on the General Purposes and Audit Committee.

The Committee heard that Nousheen Hassan had handed her notice in the last Committee meeting. Since then the vacancy positon had been advertised and an interview had taken place. The process had been carried out and the interview panel identified a successful candidate.

Members of the Committee look forward to welcoming the new Member to sit on the Committee in the future.

The Committee RESOLVED to:

§  Supports the recommendation of the recruitment panel for the preferred candidate to be appointed as an independent non-voting co-opted member of the Committee; and

§  Recommends to Full Council that the appointment should be confirmed for the remainder of the municipal year and that said appointment be subject to the Code of Conduct for Non-Voting Co-optees.

This report updates Members on a number of in-year appointments made either by the Leader of the Council under executive powers or by the Council Solicitor under delegated powers since the last meeting of the Committee.

The report provided before the Members was received for information.

The Committee RESOLVED to:

§  Note the in-year appointments made under delegated powers by the Council Solicitor and the Scrutiny and Overview Committee as detailed in paragraph three of the report.

This is for the Committee to formally note the moving of the date for Council from 5 to 12 October 2020.

The report provided before the Members was received for information.

The Committee RESOLVED to:

§  Note the moving of the date for Council from 5 to 12 October 2020.

The following motion is to be moved and seconded where it is proposed to exclude the press and public from the remainder of a meeting:

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”

This was not required.