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 members.

For the record, Councillor Kyrsten Perry stated that she was the Chair of the Pensions Committee.

To confirm the minutes of the Audit Committee held on 29^th July 2021.

The minutes from the meeting held on the 29th July 2021 were agreed to be an accurate record of the meeting and were approved by the Committee.

Under matters arising, the Chair Councillor Whitehead referred to page 20 of the agenda and the item raised under any other business. She confirmed the Committee would be receiving a report on complaints at the December meeting of the Committee.

There are no Deloitte items for consideration.

There were no reports from Deloitte for consideration.

Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 officer, and Ms Marion Kelly, Programme Director for the Finance Improvement Team presented an update in relation to the Accounts and the Improvement Plan.

Mr Bartle stated a significant milestone had been reached with the publication of the draft 2018/19 and 2019/20 accounts, which had been restated and published on the Council’s website. Mr Bartle explained that although the plan was to present these to the Committee at this meeting, due to the significant queries that had to be resolved the accounts had only been published today and required the external auditors Deloitte’s opinion before they could be brought to the Committee. Mr Bartle said there was a possibility of holding an extraordinary committee meeting in late December or January 2022, to give the external auditors time to undertake their work. He said this had been recognised by the Chair, as the next scheduled meeting after the December meeting was not until March 2022.

In relation to the 2016/17 and 2017/18 accounts, Mr Bartle said the Finance Team had worked with KPMG about the issuing of the final certificates. He said KMPG had agreed to begin work on the incomplete set of statements and the plan was to achieve this by the end of the calendar year, although this depended on the progress KPMG were to make.

Referring to the 2020/21 accounts, Mr Bartle said a letter from Deloitte was appended with the report which had been circulated to the members. Mr Bartle said the statutory deadline had been missed but they were now on track to complete the accounts by late November 2021. He said whilst this was disappointing, he hoped these could be presented to the committee, along with the other sets of accounts at the extraordinary meeting. 

Mr Bartle said one of three interim Chief accountants had left the Council however they were actively recruiting additional resource to help manage the 2021/22 accounts. Mr Bartle said due to the delay with the 2020/21 accounts, these were likely to be audited by Deloitte between January and March 2022, when they ought to be preparing for the 2021/22 accounts. Mr Bartle said he hoped there would not be seven years of accounts open and wanted to reassure members the previous sets of accounts would be presented to them at the extraordinary meeting.

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

• Councillor Perry said it was reassuring to hear the progress being made but asked what the views of Deloitte were in relation to the current position.
• Mr Jonathan Gooding and Mr Angus Fish, from Deloitte were present for the meeting and as such Mr Gooding responded to the question. He said officers had been working hard and diligently to resolve the various queries that had been raised and whilst progress had been slow, a large volume of queries had been dealt with. Mr Gooding said in recent weeks the repreparation of the previous year’s  ...  view the full minutes text for item 4.1

Mr Paul Rock, Head of Internal Audit, Anti-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 July 2021. An update on anti-Fraud activity was also included in the report.

Mr Rock said a total of six audits had been finalised this quarter, of which four had achieved a limited assurance. Mr Rock said there had been a change in emphasis in how assurance reports are reported, with a move away from reporting by exception to reporting a more balanced view, including those areas which had achieved a reasonable assurance. Hence the good and the challenging areas were being reported on. He said one report relating to contract monitoring had been split into two to show the split opinion. Mr Rock said officers from the service areas were present for the meeting to provide an update on the assurance and the actions taken to remedy the recommendations made by the Internal Audit team.

Mr Rock highlighted the anti-fraud activity and said the new Fraud Prevention Officer was having a positive impact. He said a wide range of work designed to raise awareness of fraud across the authority had started to improve fraud prevention measures. He said the easing of Covid-19 restrictions meant the fraud investigation teams had started to clear the backlog of cases to investigate, with 28 properties being recovered this quarter relating to social housing fraud. Mr Rock said good progress had been made in relation to NFI matches – national fraud initiative, which had led to some positive outcomes. Mr Rock said there needed to be an increase in management activity across the full range of reports and as such he was meeting with key officers to offer advice and support on how they might manage that workload, especially where there had been a high number of matches.

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

• Councillor Edgar commented he was pleased the Fraud Prevention Officer was having a positive impact and said it was important to raise awareness cross the whole council. Referring to page 50 onwards and the NFI matches, Councillor Edgar questioned why there were a high percentage of closed cases. He said he appreciated not every match resulted in an investigation but queried why, for example blue badge fraud resulted in 253 cases being closed. Mr Rock responded stating he had two officers dedicated to blue badge fraud and this area was considered a high priority. He said from experience, the deceased data from DWP was not reliable and therefore additional inquiries to confirm a person had passed away had to be made before action is taken to remove the badge. Mr Rock said due to the number of matches, areas were categorised as high, medium and low priority and resources were targeted towards those where officers can achieve results. Mr  ...  view the full minutes text for item 4.2

Mr Paul Rock, Head of Internal Audit, Anti-Fraud and Risk said the report presented was the regular quarterly report to the Committee, which provided an update on the Corporate Risk Register. Mr Rock said the report provided an update against the Risk plan, which was challenging due to resources. However, there had been an improvement in risk management across the Council, with each Directorate being more focussed on their Directorate level risks and associated mitigation actions.

Mr Rock said Ms Denise Radley, the Corporate Director for Health, Adults and Community Directorate plus her management team, were present for any questions in relation to the Directorate’s risk register.

Ms Denise Radley, then addressed the Committee and said her Directorate consisted of four divisions: Public Health, Social Care, Integrated Commissioning with the NHS and Community Safety. She said this also included civil contingencies.

Ms Radley said the Directorate had large operational services, with adult social care and community safety being the biggest area of responsibility plus a wide range of services being commissioned jointly such as care homes, domiciliary care, substance misuse etc. She said an integral part of their provision was underpinned by themes of safeguarding, mental health and protecting vulnerable people. Ms Radley said there was significant risks associated with providing services in these areas and therefore the prevention of risk was paramount. 

Ms Radley referred to the Directorate risk register commencing on page 91 of the agenda and referenced risk ASD0015, risk of death or serious harm to a vulnerable adult. She said a multi-agency approach was used to identify risks, with the Adult Safeguarding Board providing oversight across all partner agencies. Ms Radley referenced risk ASD0028 and said there was ongoing pressures within adult social care relating to budgets which had been made more complex due to Covid-19. She said the emergency funding provided by government had assisted the financial position short-term, however there was an improvement programme to assist the Directorate to get to a more sustainable budget position.

Ms Radley said her senior Directors were present to answer questions relating to their areas of expertise.

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

• In reference to page 76, Corporate risk register and how the changes to work practices relating to the budget have been incorporated within the Directorate, Ms Radley stated there had been a lot of work done to improve the knowledge and skills of budget managers. She said excellent quality training and briefings had been provided by finance colleagues and they worked closely with the Finance Business partner to ensure managers were engaged in the process and had oversight for their area of responsibility. Ms Radley added the budget realignment work within the Directorate was still ongoing however the finance improvement work was having a positive impact on budgets and accountability.
• In reference to page 82, Corporate risk register and the use of surveillance cameras, Ms Ann Corbett, Director of Community Safety, provided the Committee with background on how video  ...  view the full minutes text for item 4.3

Mr Paul Rock, Head of Internal Audit, Anti-Fraud and Risk stated the report was an annual update on the work of the Insurance Service and its performance. He said this was the second year that such a report was being presented to the Committee even though there was no statutory requirement for the Committee to receive a report on the insurance activity. Mr Rock said he hoped it would provide some insight into the role of the Insurance and Claims handling team which were a part of his service.

Mr Rock said the report provided an overview of the work and key policies that were being tendered through the London Insurance Consortium. He said the policies would cost £4.5M over the next five years, despite having excesses of between £0.5M to £2M, depending on the policy. Mr Rock said there was a slightly reduced claim profile this year and said this was likely due to the national lockdowns and the fact less people were out, reducing the chances of slipping, tripping and falling than in previous years. Mr Rock said that going forward, he would expect to see an increase in the number of claims made.

In respect to benchmarking against other Councils, Mr Rock said this had not been as straightforward as he expected. He said there were nine authorities within the Consortium however the information provided was not easily digestible. He said he hoped to provide further information in a future report to the Committee.

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

• Referring to paragraph 3.23, members asked why the benchmarking information had been difficult to acquire. Mr Rock explained the data that had come back from the Consortium was for 2020, for one year and therefore could not be compared over a four-year period, as he would have liked. Mr Rock said the data needed to be more fully incorporated and he was working with the Consortium to attain the information that he required.
• In respect to paragraph 3.20 and MMI insured public sector authorities, Mr Rock said he would provide a written answer to the Committee regarding their involvement in this, since the company ceased trading in September 1992.

• ACTION: Mr Rock to provide members with a written response regarding MMI insured public sector authorities.

• In relation to paragraph 3.13, the Chair asked if leaseholders were aware of the opt-in scheme and why there was such a low take up. Mr Rock responded saying the scheme was a voluntary scheme promoted by Tower Hamlets Homes and there would be several reasons why people did not take up the offer, ranging from making a saving by not insuring to insuring their household contents separately.

The Committee RESOLVED to:

1. Note the contents of the report.

Mr Bartle, Interim Corporate Director for Resources and Section 151 Officer presented this report stating the Audit Committee was being asked to approve the process for the appointment of external auditors for the next five years. Mr Bartle said it was recommended that the Council join the Public Sector Audit Appointments (PSAA) scheme, who would oversee the process of appointment.

Members of the Committee had no questions for Mr Bartle.

The Audit Committee RESOLVED to:

1. Recommend to full Council that the Council opts into the national scheme operated by the PSAA for external audit appointments.

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

Councillor Edgar stated the work plan was very useful and was pleased to note the training sessions were included in the work plan.

The Chair noted that the next training session, scheduled for the 24^th November would be the risk session that members had requested.

Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 officer asked the workplan note the potential for an extraordinary meeting being scheduled in December 2021 or January 2022.

The Chair, Councillor Whitehead stated that following a letter received from Councillor Wood, a former member of the Committee in August relating to a prosecution, she had discussed the matter with legal services and with Mr Rock. She said two things had been of particular interest, handling of informant information and how information is shared. She informed members of the Committee that she had asked Mr Rock to produce a report in relation to this and this was expected to be discussed at the December 2021 meeting.