Agenda item

NOTE: This item was updated on 6/09/2022.

David Hughes (Director of Audit, Fraud, Risk and Insurance) introduced the report and welcomed Paul Dossett (Grant Thornton) to the meeting.

Paul Dossett presented the Council’s 2020/21 Statement of Accounts, including the Pension Fund Accounts and Annual Governance Statement. He noted that Grant Thornton had not identified any significant weaknesses, or made any key recommendations, but had identified twelve opportunities for improvement, which were set out in the report.

Councillor Adrian Pascu-Tulbure, in reference to page 19, asked how confident officers and the auditors were about the assumptions relating to the pay freeze, a limited increase in business rates, and inflation pressures. Andre Mark (Head of Finance) said the Council’s medium term financial strategy included contingencies for worst case scenarios. Pay inflation was a concern but the Council had options in the budget to address it.

Councillor Florian Chevoppe-Verdier, in reference to page 17, asked what the methodology and processes were for information review. He also asked if there were examples of cases where information was left out. Paul Dossett said the auditor’s role was to consider the arrangements the Council had in place, not deep dive into specific areas. The auditors looked at how reports were brought to committees, whether the information in reports was sufficient for decision-makers. It was not a data sufficiency audit.

Lisa Redfern (Strategic Director of Social Care) added that each Cabinet Member had regular budget update meetings with senior officers, in addition to Cabinet level monthly budget updates. There were also challenge sessions with members and officers as part of the budget setting process. Sharon Lea (Interim Chief Executive) noted all reports followed detailed templates and guidance – governance processes were thorough, and officers were fully transparent with members.

Councillor Chevoppe-Verdier noted the suggestion to reduce the size of the risk register and asked what the suggested scale of the reduction was. Paul Dossett said his view was that the risk register should be around 6 to 10 key issues. David Hughes said he was working with SLT colleagues to review the corporate and directorate level registers to ensure SLT had visibility of the key issues in departments.

The Chair asked if a more concise central register risked reducing the ability of SLT to have oversight of risk management at the corporate level. Paul Dossett said their thinking was that the corporate centre was managing too many risks. SLT should manage corporate level risks and departments should manage the risks relevant to them.

Councillor Pascu-Tulbure, in reference to page 39, asked why the unit costs were so high in a number of areas, if there was a plan to get costs down, and what an acceptable benchmark would be. Councillor Rowan Ree (Cabinet Member for Finance and Reform) said benchmarking did not account for H&F’s policy choices like free homecare, free meals for school children, and council tax freezes.

Councillor Chevoppe-Verdier asked for more information on the Section 151 Officer referenced in the report. Paul Dossett said it was a statutory role all Councils had, and they provided a risk commentary on the budget setting report. If they considered the Council was about to act illegally by not setting a balanced budget, they had a duty to say that in a Section 114 report.

Councillor Chevoppe-Verdier asked what proportion of boroughs had set up partnership registers. Paul Dossett said he was not sure, but it was good practice as it provided clarity, particularly for members to allow them to scrutinise and challenge.

Councillor Chevoppe-Verdier noted the report referred to Contract Assurance Board, but it was not a public board and asked why. David Hughes explained that it was an internal officer board to review procurement reports to ensure all matters had been considered and it complied with procurement requirements.

Councillor Chevoppe-Verdier asked officers to consider whether the papers for the board should be made public.

ACTION: David Hughes

The Chair asked, in reference to recommendation 12, if officers were content the Council remained compliant with its legal obligations around procurement. David Hughes said they were and internal meetings like Contract Assurance Board gave assurance.

Councillor Pascu-Tulbure, noting the Government funding the Council received in the form of Covid grants, asked officers to comment on the negotiations mentioned in the report. David Hughes said the audit team assisted with payment of grants to businesses. They followed the pre and post payment checks the Government recommended and worked with Government on recovery where necessary. H&F had robust process for managing the payment of grants.

Councillor Chevoppe-Verdier asked about the two documents noted as missing in the report – the People Strategy and the Housing Transformation Programme. Sharon Lea said the Council did have a published People Strategy which included achievements such as reducing the agency bill by £12m and increasing the number of apprentices. David Hughes noted that it had been sent to an auditor, but it coincided with a period of absence and wasn’t included in the final report. Members asked for the final report to be updated to reflect that. Jon Pickstone said Housing would engage with Grant Thornton and send the Housing Transformation Programme to them.

ACTION: Jon Pickstone / Paul Dossett

Councillor Chevoppe-Verdier asked why the Commercial Revenue Committee had not met. Councillor Ree noted that the committee was convened on an ad hoc basis but had not met since the election. Commercial revenue issues were discussed regularly in Cabinet.

RESOLVED

The Committee noted the content of the external auditor’s ‘Annual Audit Report 2020/21’, including the auditor’s findings, recommendations, and the Council’s response to those recommendations.