Councillor Abdul Malik moved, and Councillor Kabir Ahmed seconded, that Councillor Amin Rahman be appointed as the Vice-Chair of the Audit Committee for the 2024-25 municipal year.

This was put to the vote and was agreed:

RESOLVED

1.    That Councillor Amin Rahman be appointed Vice-Chair of the Audit Committee for the 2024-25 municipal year.

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 Declarations of Disclosable Pecuniary Interest.

To confirm the minutes of the Audit Committee held on 23^rd April 2024.

The Audit Committee RESOLVED:

1.    That the unrestricted minutes of the Audit Committee held on 23^rd April 2024 be approved and signed by the Chair as a correct record of proceedings.

Ms Farhana Zia, Democratic Services Officer introduced the standard Terms of Reference report. She explained that each Committee is presented with its Terms of Reference and related information for noting.

In discussion of the report, most members were pleased with the changes that had been made to the membership and composition of the Committee with some expressing concern the changes did not go far enough as there was still a Cabinet Member on the Committee.

Ms Jill Bayley, Deputy Monitoring Officer explained to new members of the Committee that each recommendation had been voted on by the Audit Committee and this was the agreed change to the Committee.

The Audit Committee RESOLVED to:

1.    Note the Terms of Reference, Quorum, Membership and Dates of future meetings as set out in Appendices 1,2, and 3 of the report.

2.    Determined the preferred time at which to schedule meetings will be 6:30 p.m.

Mr Stephen Reid from EY (Ernst & Young) introduced himself and his colleagues who had joined online and said EY would be taking over from Deloitte as the external auditor for the 2023/24 accounts onwards. He said progress was being made regarding the accounts and he hoped to present their findings at the next scheduled meeting of the Audit Committee.

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

·       Mr Reid confirmed preliminary discussions had taken place with Deloitte regarding the handover and both firms were cooperating. There were no concerns from EY.

·       In response to members being informed of any concerns as soon as possible, Mr Reid stated there was a set procedure that both firms had to follow. Therefore, whilst the judgements of the external auditors may differ, this would be reported in their report with an explanation as to why.

The Chair thanked Mr Reid for his update and welcomed EY to London Borough of Tower Hamlets. He hoped the Audit Committee would have a good working relationship with EY.

Mr David Dobbs, Head of Internal Audit, Anti-Fraud and Risk introduced the Annual Governance Statement (AGS) for 2023/24. Mr Dobbs stated the Audit Committee had remediated the backlog of AGS’s for previous years and was now in synchronisation with the accounts closure timetable. He explained the AGS formed part of the accounts closure process.

Mr Dobbs said the progress made against significant Governance issues identified in the previous AGS 2022/23 were listed on page 29 of the supplementary agenda. Recommendations from the LGA Peer Review and Best Value Inspection had been considered.

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

·       Members commented the AGS Statement was well presented however thought that it could be more balanced with the positives and negatives that were identified by the Peer Review and the BV inspection. Mr Dobbs said the statement presented was seeking comments of members and that this would be further reviewed before being presented to the Committee at its July meeting. He said it was a public document and was anodyne in nature.

·       Referring to page 31 of the supplementary agenda members asked if more clarity to be provided about the ‘respective savings’. What were the risks if the savings were not delivered. Likewise referring to page 33 about the ‘reliance on agency’ staff, members wanted to know how much of a saving this would be.

·       Councillor Bustin stated the conclusion needed to be strengthened, with a more balanced view of the Council’s governance arrangements.

o   ACTION: Mr Dobbs said he would reflect on the comments made and would sense-check the AGS, by sharpening the conclusion and providing more information where appropriate.

·       Ms Lorraine, Corporate Director for Resources explained the AGS was a commentary on the governance processes in place. She said the Audit Committee’s role was to ensure the controls were effective and the statement met with CIPFA guidelines and was a true and fair reflection of the CURRENT situation, that situation would change over time and, at the point of approving the final signed statement, events would be updated e.g. the outcome of the BVI inspection would be clear and then reflected. She said individual views were subjective, but observations made by Audit committee members would be noted in the minutes and appropriate, reflected in the final document.

The Audit Committee RESOLVED to:

1.    Note the Annual Governance Statement for 2023/24 and the comments made by members, with Officers reflecting on the comments made before presenting the AGS with the Annual accounts.

Members of the Audit Committee noted the Committee work plan and made the following suggestions:

·       External Reviews such as the CIPFA review be added to the work plan.

Ms Lorriane, Corporate Director for Resources stated internal controls and assurances were provided as part of the quarterly internal audit report. The Committee’s role was to ensure the control environment was effective and systems were in place to address any weaknesses. Ms Lorraine reiterated the importance of the committee’s oversight of the framework of internal controls.

The Audit Committee RESOVLED to:

1.    Note the Committee workplan for 2024-25.

There was no other business to be discussed by the Committee.

Councillor Marc Francis questioned why the next item on the agenda was private and confidential. Ms Lorraine, Corporate Directorate for Resources stated she was acting on advice and, due to the on-going investigation, the report remained confidential.

In view of the contents of the remaining items on the agenda the Committee is recommended to adopt the following motion: “That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded from the remainder of the meeting for the consideration of the Section Two business on the grounds that it contains information defined as Exempt in Part 1 of Schedule 12A to the Local Government Act,1972.”

EXEMPT SECTION (Pink Papers)

The Exempt/Confidential (pink) papers for consideration at the meeting will contain information, which is commercially, legally or personally sensitive and should not be divulged to third parties. If you do not wish to retain these papers after the meeting, please hand them to the Democratic Services Officer present or dispose of them in the confidential bins.

The Chair MOVED

And it was RESOLVED that

“In view of the contents of the remaining items on the agenda the Committee is recommended to adopt the following motion: “That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded from the remainder of the meeting for the consideration of the Section Two business on the grounds that it contains information defined as Exempt in Part 1 of Schedule 12A to the Local Government Act,1972.”

The minute for this item is restricted.