Members are reminded to consider the categories of interest, identified in the Code of Conduct for Members to determine: whether they have an interest in any agenda item and any action they should take. For further details, see the attached note from the Monitoring Officer.

Members are also reminded to declare the nature of the interest at the earliest opportunity and the agenda item it relates to. Please note that ultimately it is the Members’ responsibility to identify any interests and also update their register of interest form as required by the Code.

If in doubt as to the nature of an interest, you are advised to seek advice prior the meeting by contacting the Monitoring Officer or Democratic Services.

There were no pecuniary declarations of interest declared at the meeting by the members.

To confirm the minutes of the Audit Committee held on 20^th October 2021.

The minutes from the meeting held on the 20^th October 2021 were agreed to be an accurate record of the meeting and were approved by the Committee.

There were no reports from Deloitte for consideration.

The Mayor, Mr John Biggs introduced the report and stated steady improvement had been made since 2015, in respect to the governance processes within the council. The Mayor said progress had been made in children services with better outcomes for children and families, however 2020-21 had been a challenging year for the Council, especially with the challenge of Covid-19. The Mayor said the Council had responded to this crisis extremely well and continued to make improvements in areas such as financial accounts and budget processes. The Mayor said there was still work to do regarding Special Education Needs however the Council was on the right track to improve.

Mr Paul Rock, Head of Internal Audit, Fraud and Risk added this was a draft copy of the Annual Governance Statement (AGS) and Committee members were being asked for their comments. Mr Rock said the final version of the AGS would be presented to the Committee along with the financial statement of accounts at the January 2022 meeting.

In response to comments and questions from Member the following was noted:

• Councillor Edgar concurred this had been a challenging year for the Council. He asked the Mayor what opportunities Covid-19 had presented? The Mayor responded stating the biggest transformation was the step towards remote working, which had been liberating. He said this had improved the work/life balance for staff but equally the Council had to be mindful of isolation and mental health of staff. He said it had also increased cross-departmental working with the use of electronic meetings.
• Mr Rock added that from the feedback he had received directors and managers felt more empowered during the pandemic to make quicker and faster decisions. He said this should be retained whilst looking to improve governance and streamline processes.
• In respect to the ‘limited’ assurance given, Mr Rock said he would base his opinion on several considerations, such as the outcomes of internal audit and anti-fraud activity undertaken during the year plus the significant issues with the statement of accounts as well as external assurance reports.
• Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 Officer said the direction of travel for the Council’s accounting systems and processes, had been significantly overhauled and improved and said this ought to be recognised. 
• Councillor Khan quoted from a letter dated 21^st July 2021 from the Local Government Social Care Ombudsman and asked why the issue raised therein had not been included in the AGS. Discussion regarding the letter took place and it was agreed this could be included in the final AGS.

• ACTION: The points raised in the letter to be incorporated and addressed in the AGS, after consultation with the Mayor and Chief Executive and appropriate Director.

The Audit Committee RESOLVED to:

1. Review and agree the 2020/21 Annual Governance Statement.

Mr Paul Rock, Head of Internal Audit, Fraud and Risk presented the Corporate Risk Register and said this was a regular report to the Committee. He said the report provided an update against the Risk plan and how the Council was performing against key targets. Mr Rock said Directors from the Place Directorate were also present for any questions relating to the Directorate’s risk register. 

Mr Rock also thanked members of the Committee and the Overview & Scrutiny Committee members for attending the risk session that was held on the 24th November and said the matters raised were being prioritised and would be presented to the Corporate Leadership Team. 

In response to questions and comments from members, in relation to the Corporate Risk register the following was noted:

• Ms Charlotte Webster, Independent person stated the Corporate Risk Register, and the Directorate Risk Register were rather long and not easily accessible. She asked if it were possible to pull out and highlight the top risks for each register, with commentary on what progress had been made to lower the risk.

• ACTION: Future reports to the Audit Committee to highlight the top risks for each register and provide a commentary on the action taken to lower the risk.

• In reference to page 52, RS0056, Councillor Khan asked how the additional money from the government, during Covid-19, had been used and accounted for? Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 said that as far as the risk register is concerned, it was not felt necessary to account separately for Covid grants in relation to whether the Council might overspend overall, although details of Covid related spending is analysed in detail in the regular budget monitoring reports to Cabinet.
• In reference to page 53, BCLR013, Councillor Khan asked about the EU-UK trade and cooperation agreement, and why there was no comment provided under the ‘existing control measures’ column? Mr Rock, Head of Internal Audit, Fraud and Risk responded stating that this was on the corporate risk register as a means of acknowledging that there could be potential or unknown risks to the council over the coming 12 to 24 months during the exit out of the EU. Mr Rock said he would speak to the owner of the risk to see if more specific information and mitigations as required to be added to the risk.
• In reference to page 54, ASD0015 and vulnerable adults, Councillor Khan asked if complaints were used to monitor the progress against the risk. She said the letter she had referenced earlier ought to be included under this risk. Ms Denise Radley, Corporate Director for Health, Adults and Community stated the letter referred to did not relate to Adult Social Care. She explained how issues raised were identified and resolved at the informal stage and how the Directorate Leadership Team reviewed and analysed complaints every two weeks. Ms Radley said they identified emerging themes and triangulated issues before they developed into formal complaints.
• In reference to page  ...  view the full minutes text for item 4.2

Mr Paul Rock, Head of Internal Audit, Fraud and Risk stated the report provided members with an update on the progress made against the delivery of the 2021/22 Annual Audit Plan and highlighted any significant issues since the last report to the Audit Committee in October 2021. An update on anti-fraud activity was also included in the report.

Mr Rock said progress had been slower this quarter largely due to the resources available. He said he hoped to have a new member of staff start in the New Year but in the meantime would be using BDO – their external auditor partner to undertake some of the audits as per the audit plan. Mr Rock said he was ‘on course’ to deliver 30 audits this year, as he had done for the past two years and that this would provide enough evidence from him to base his annual opinion on.

In respect to management responses to reports these had been slow and as such Mr Rock had raised this with the Corporate Leadership Team. He said the fully implemented, higher priority actions were at 35% and whilst the overall percentage is 80-85%, if the partially implemented high priority areas are also included, this figure needed to improve.

He said the Fraud outcomes continued to be on a positive trajectory, with a further conviction secured for housing fraud. Mr Rock also referred members to paragraph 3.27 and said changes had been implemented in respect to how information is managed from informants. In respect to the second action relating to how information is shared, Mr Rock said he would report back in March 2022 once he has discussed and formed a view on this.

In response to questions and comments from members the following was noted:

• The Chair Councillor Whitehead said it was disappointing the actions agreed with management were at 35%. She said as these were agreed actions, she would expect management to actively look to implement them as soon as possible.
• In relation to the NFI, and data matches the Chair asked if this related to the resources issue, within the team? Mr Rock said his team co-ordinated the NFI matches on behalf of the Council. However, it was for individual officers/managers to best manage the risk, within the resources they have. Mr Rock said there was no doubt there was a resourcing challenge when it came to reviewing over 11,000 matches.
• Referring to the Audit Plan 2021/22, page 105 and the audit relating to ‘Climate Change’, the Chair requested this audit be pushed back to the ‘green’ list as it was an important topic to audit and scrutinise. Councillors Perry and Khan agreed with this. Councillor Khan added that an equalities impact assessment on how Climate Change affects BAME communities should also be included.

• Mr Rock agreed to adding the ‘Climate Change’ audit back on the plan and said the information provided in the workplan was a high-level outline for the audit. He said the audit would be scoped  ...  view the full minutes text for item 4.3

Mr Paul Rock, Head of Internal Audit, Fraud and Risk stated the Public Sector Internal Audit Standards required the Internal Audit Charter and Anti-Bribery Policy to be reviewed annually. He said the charter and policy had been updated to reflect the current roles and responsibilities and ensure it is fit for purpose.

Members of the Committee had no question from Mr Rock.

The Audit Committee RESOLVED to:

1. Review and approve the Internal Audit Charter; and
2. Review and approve the Anti-Bribery Policy.

Mr Nisar Visram, Director of Finance, Procurement and Audit presented the Treasury Management mid-year report. He said the report summarised the council’s investments and borrowing as at 30^th September 2021. He said the economic outlook and interest rate forecast from the Council’s treasury advisors Arling Close informed how the treasury management activities were performing. Mr Visram referred members to paragraph 3.4.8 and the table therein and said interest rate increases were anticipated.

In respect to investments, Mr Visram said £328M was invested and appendix 1 gave a breakdown of where the investments were held. He said investments were mainly in money market funds or with other public sector bodies. He said the council was on target to meet the budgeted investment returns. In respect to borrowing, £71.5M were from external loans, mainly with the Public Works Loan Board or banks. Mr Visram said, looking at the prudential indicators, they were within the limits set at the beginning of the year.

In response to questions and comments from members the following was noted:

• Councillor Edgar stated he found the report to be clear and comprehensive. He said he liked the format of the report.
• Councillor Perry said it this was one area the council should be proud of. She said the investments and collective pooling as a strengthen against the backdrop of the other financial struggles and pandemic the council was facing.

The Audit Committee RESOLVED to:

1. note the contents of the treasury management activities and performance against targets for the half year ending 30 September 2021; and
2. note the Council’s investments as set out in Appendix 1. The balance outstanding as at 30 September 2021 was £328.20m.

Ms Raj Chand, Director of Customer Services presented the complaints report and said this report had been requested by the Committee. She said the report set out how complaints are responded to from the Local Government and Social Care Ombudsman (LGSCO) and the lessons learnt. Ms Chand said the annual review letter referred to earlier by members was appended to the report and said the number of complaints had reduced from 47 in 2018/19 to 39 complaints in 2020/21. She said the performance percentage had increased from 34% to 69% but further work was required to improve the response rate. Ms Chand referred members to the historical issues set out at paragraph 2.4 of the report and the service improvements set out at paragraph 2.9. She said steps were being taken to improve the handling of LGSCO complaints, with better use of technology, guidance and a outcomes-based protocol.

Referring to the LGSCO letter, appended at Appendix 1, the statistical data showed 83% of complaints were upheld, with 95% of recommendations being implemented, with 4% of complaints being judged as being satisfactorily remedied by the Council. Ms Chand said with the service improvements cited she hoped further progress could be made.

Ms Chand also said the Information Governance structure was also being reviewed to see how complaints handling, members enquiries and information requests are processed and responded to.

In response to questions and comments from members the following was noted:

• The Chair said it was good the report recognised the missed timescales, for the areas covered by the Information Governance team. The Chair gave an example of a missed deadline for a housing association query that she had raised and said it was important for the Council to ensure the data and records it held aligned with Registered Providers. Ms Chand responded stating work was ongoing in relation to this and she had met with the Tower Hamlets Housing Forum, together with members of the General Purposes Committee to ensure the data held was accurate and that there is continued dialogue between them.
• Councillor Edgar commented that the letter from the LGSCO was blunt and said they had made helpful suggestions on how to improve the complaint process. He said he was encouraged by the trends and said it gave some measure to drive change in the handling of complaints. Councillor Edgar said it was important to ensure communication with complainants was clear and timely. Ms Chand responded stating she agreed with the observations made by Councillor Edgar and said a key part of the review would be to complete the circle, in terms of how the Customer had found the complaint handling process. Ms Chand offered to provide an annual and/or quarterly report on complaints if this was what the Committee wanted.
• Councillor Khan asked why the letter from the LGSCO published in July 2021, was coming to the Committee in December 2021. Referring to the letter she said the 25 upheld decisions related to Adult Social Care, Housing and  ...  view the full minutes text for item 4.6

The Audit Committee noted the work plan for the forthcoming meetings of the Committee.

There was no urgent business to be discussed.