Agenda and minutes
Venue: Committee Room One - Town Hall, Mulberry Place, 5 Clove Crescent, London, E14 2BG. View directions
Contact: Farhana Zia, Democratic Services Tel: 020 7364 0842, E-mail: farhana.zia@towerhamlets.gov.uk
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APPOINTMENT OF VICE-CHAIR Minutes: Following the resignation of Cllr Muhammed Harun from the Council, the Chair asked members of the Audit Committee to put forward nominations for the Vice-Chair position.
Cllr Puru Miah proposed and Cllr James King seconded the nomination of Cllr Tarik Khan, being elected as vice-chair of the Sub-Committee.
Cllr Tarik Khan accepted the nomination which was agreed by all Members of the Committee.
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DECLARATIONS OF DISCLOSABLE PECUNIARY INTEREST PDF 67 KB To note any declarations of interest made by Members, including those restricting Members from voting on the questions detailed in Section 106 of the Local Government Finance Act, 1992. See attached note from the Monitoring Officer.
Minutes: There were no declarations of disclosable pecuniary interests from the Members present at the meeting.
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MINUTES OF THE PREVIOUS MEETING(S) PDF 114 KB To confirm the minutes of the Audit Committee held on 8th November 2018. Minutes: The minutes from the 8th November 2018 meeting were agreed and approved to be an accurate record of the meeting.
Matters Arising Mr Anthony Sotande-Peters updated Members with regard to item 4.2 page 12 of the agenda CSDR0011. He informed Members the court case was heard last week and the Judge had given both sides until the end of the month to submit further submissions. Mr Sotande-Peters said this was the update he had received from the Legal Department. The case was still ongoing and had not concluded, as some reports in the media had claimed.
In relation to query raised under any other business, page 17 of the agenda, Mr Steven Tinkler stated the Divisional Director for Human Resources had replied directly to Cllr Khan. Cllr Khan stated he had not had a full response to the question raised, to which Mr Tinkler stated he would take this up with the Divisional Director for HR. The Chair asked to be copied into the emails between HR/Steve Tinkler and Cllr Khan.
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DELOITTE ITEMS FOR CONSIDERATION PDF 121 KB Minutes: Mr Jonathan Gooding and Mr Angus Fish from Deloitte’s introduced themselves to Members of the Committee and stated that their organisation had taken over the role of external auditors of the Council.
Mr Gooding said the letter included in the agenda pack set out the fees which would apply to the work which they had been tasked to undertake. Mr Gooding stated his team were currently conducting an interim audit and would bring a detailed audit plan for Members to consider at the next meeting
In response to questions from Members the following was noted:
· Approximately 2 to 3 thousand hours are spent on auditing activities both on and off site.
· Auditors will examine issues as per the value for money requirements and if a particular issue has been identified, Auditors are required to examine it.
The Chair thanked Mr Gooding and Mr Fish for attending the meeting.
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TOWER HAMLETS ITEMS FOR CONSIDERATION |
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Internal Audit and Anti-Fraud Progress Report PDF 136 KB Minutes: Mr Steven Tinkler, Interim Head of Audit and Risk Management, introduced this report stating the report provided an update on the progress made against the delivery of the 2018-19 Annual Audit Plan, as well as the current counter fraud performance and audits which have received limited assurance ratings.
Mr Tinkler highlighted to the Committee that the Council had appointed BDO to support the delivery of the 18/19 audit plan. BDO would specifically be concentrating on the delivery of school, specialist ICT and system related audits.
In particular Mr Tinkler referred members to paragraph 4.8 of the report and stated the internal audit team had been commissioned by the Chief Executive to provide a lesson’s learnt report on the recent move of Tower Hamlets Homes to Boatman House.
Mr Tony Qayum referred Members to the tabled information in paragraph 5.2 of the report as well as paragraphs 5.3, 5.4 and 5.5.of the report. Mr Qayum said the Cabinet Office data matches as part of the National Fraud Initiative (NFI) had just been received and officers within his team would be working through approximately 25,000 matches.
In response to questions from Members the following was noted:
o ACTION: It would be useful for new Members of the Committee to receive a presentation on the National Fraud Initiative.
o ACTION: Can a report be provided on the progress made by those services areas who reported a limited assurance and have attended before this Committee.
· Mr Tony Qayum stated the council had raised awareness in relation to Social Housing Fraud and would continue to work with the Communications team to this end. Mr Qayum also confirmed the team had retrieved 45 homes which had been fraudulently let and were on target to achieve 50 homes by the end of the financial year.
· Mr Qayum confirmed referrals to the anti-fraud team come via various channels including referrals from Tower Hamlets Homes. Mr Qayum said he expected a spike in identifying new cases, especially as the NFI match results would need to be further investigated.
· Mr Qayum confirmed other social landlords, other than Tower Hamlets Homes were included in the figures. Mr Qayum said the RSL have trained investigators who operate in a similar way to the Council’s team.
· Mr Qayum also asked Members to note a correction at 5.2 and said the Right to buy figure should state 10 rather than 107.
Members of the Committee also heard from each Service Area Director where a limited assurance had been given.
Framework-i
Mr David Jones. Interim Divisional Director for Adult Social Care stated the issues highlighted in the internal Audit report had been responded to by way of an action plan which was finalised at the beginning of January 2019.
He said teams within Adult Social Care were in a process of restructure with the aim of bringing together the brokerage and integrated social work teams plus the commissioning teams. He said work was ongoing to improve the workflow and processes in place. With ... view the full minutes text for item 5.1 |
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Q3 Risk Management Update 2018/19 PDF 142 KB Additional documents:
Minutes: Mr Steven Tinkler, Interim Head of Audit and Risk Management introduced this report stating that the purpose of the report was to inform members of the ways in which risks are identified and managed. The report provided a summary of risk activities over the third quarter 2018/19 and appended at Appendix 1 was the Corporate Risk Register.
In response to questions raised by the Committee the following was noted:
· Mr Sotande-Peters confirmed the legal action with regard to Christchurch had not been lost by the Council, as reported by the Church Times. The Council had been asked to make further submissions by the 31st January 2019. Mr Sotande-Peters said the risk had been removed from the corporate register but remained on the Directorate level register. Mr Sotande-Peters said he would obtain a further update which he would email to members
o ACTION: Mr Sotande-Peters to obtain a further update from Legal about risk CSDR0011 which he would email to members.
· With regard to risk CSD0016, Mr Sotande-Peters confirmed this would remain on the corporate risk register for some time to come as this was a long term risk.
· Mr Sotande-Peters confirmed that of the risks removed, CSDR0011, CSDSC004 and RSB0019 these had been migrated to the Directorate level risk register.
· Members enquired about risk CSDSC0005 and the Troubled Families programme. Mr Sotande-Peters stated that the risk owner was confident about achieving the target for the payment by results claims however he would obtain a more detailed response for Members.
o ACTION: Mr Sotande-Peters to obtain a more detailed response with regard to the Troubled Families programme and the action taken to mitigate the risk to the payment by results claims.
· In response to why risks on the corporate register are colour coded differently and how they are measured, Mr Tinkler stated that the appropriate level of risk is placed on the register in consultation with the Corporate Leadership team. Mr Tinkler said a short presentation from each Directorate on their risk could be arranged if Members desired.
o ACTION: Members agreed they would like to have access to the Directorate level risk registers.
· Mr Sotande-Peters confirmed the two new risks were added to the corporate risk register because of the following reasons. CLPRCG0040 related to the Waste Strategy and bringing the service back in-house and ICT0071 was in relation to workforce strategy and proposed restructure of Customer Services.
Members of the Committee RESOLVED to NOTE
1. The corporate risks and recommend changes and updates as necessary.
2. Request risk owner(s) with risks requiring further scrutiny provide a detailed update on the treatment and mitigation of the risk including impact on the corporate objectives at its next meeting.
3. Ensure that an effective risk management framework is in place within the Council and leading the council to be a risk mature, dynamic risk organisation.
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Additional documents:
Minutes: Mr Kevin Miles, Chief Accountant Corporate Finance presented the report and stated the report included an update on the treasury management activity, the investment strategy and the Capital Strategy. Mr Miles said the report would also be considered by Full Council at its meeting of 20th February 2019.
Mr Miles said there had been no major changes to the strategies since last year’s report and that the Council was lending to other Local Authorities rather than the banks.
Mr Miles referred Members to paragraph 3.30, the capital programme and prudential borrowing and stated that the borrowing would be up to £276m in total from 2019-2022.
Mr Miles also referred Members to paragraph 3.26 and stated that the legislation in relation to money market funds and pooled funds for Capital Expenditure for local authorities needed to be amended as these funds would become capital expenditure when the UK leaves the EU if the legislation was not amended.
In response to questions from members the following was noted:
· Mr Miles reassured Members that the government was aware of the error in legislation and was working to rectify this by the scheduled exist date of 29th March 2019. However it was a question of waiting and seeing what would happen. He said the fund would be treated as capital receipts rather than revenue income in that eventuality.
· In response to why the total fund in the table at paragraph 3.30 for 2018/19 and 2019/20 showed an increase and then a drop in 2020/21 and 2012/22, Mr Miles explained that the new Whitechapel development was the cause of the temporary increase. Mr Miles said he would confirm the reason for the peak which he believed was due to the Housing Revenue capital schemes.
o ACTION: Mr Miles to send Members of the Committee an email as to the reasons why there is an increase in the capital programme.
· Mr Miles confirmed the Council was looking to invest in ‘greener’ investments and was moving away from investing in fossil fuels if suitable investments with equivalent returns and cash flows were identified. Officers continue to work with the Council’s advisors to identify suitable investments. He confirmed this was the long term strategy of the Council.
· With respect to Mulberry Housing Society Mr Miles confirmed there were property acquisitions in the pipeline however the Society was a little behind on schedule.
Members of the Committee RESOLVED to
i. Approve and adopt the following policy and strategies:
a) The high level overview of Capital Strategy Report set out in section 2 at annex A attached to this report; b) The Treasury Management Strategy set out in sections 5-7 at annex A attached to this report, which officers involved in treasury management, must then follow; c) The new Investment Strategy set out in section 8 at annex A attached to this report, the Council has committed up to £54.6m of service investments to Seahorse Homes Ltd and Mulberry Housing Society;
ii. Approve the prudential and treasury management ... view the full minutes text for item 5.3 |
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Draft Accounting Policies 2018/19 and 2019/20 PDF 101 KB Additional documents: Minutes: Mr Kevin Miles, Chief Accountant Corporate Finance introduced the report stating the report presents the accounting policies which will be implemented during the financial year 2018-19 as reflected in the published Statement of Accounts for that period.
Mr Miles stated that there had been no significant changes to the accounting policies save the amendment to leases as per section 6 of the appendix and changes to the Minimum Revenue Provision (MRP) in relation to housing asset.
In response to questions from Members the following was noted:
· Mr Miles explained that in relation to MRP the debt would be paid off over the asset lives, which could equate to around 2% of housing debt each year. He said it was a voluntary minimum revenue provision over the life of the asset as recommended by the Local Authorities (Capital Finance and Accounting) (England) regulations 2003.
· Mr Miles also stated that in respect to the balance sheet, external valuers, would value properties owned by the Council.
Member of the Committee RESOLVED to APPROVE
1. The accounting policies and provided comment on the summary savings position
2. Agreed the amendment to the council’s policy on MRP chargeable on housing assets
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ANY OTHER BUSINESS THE CHAIR CONSIDERS URGENT Minutes: There was no any other business discussed at the meeting.
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