Agenda and minutes

Audit and Governance Committee - Thursday 25 January 2024 10.00 am

Venue: Council Chamber - Shire Hall, Gloucester. View directions

Contact: Andrea Griffiths  Email: andrea.griffiths@gloucestershire.gov.uk

Items
No. Item

1.

Declarations of Interest

Minutes:

No declarations of interest were made.

2.

Minutes of the previous meeting pdf icon PDF 94 KB

The Committee is asked to approve the minutes of the previous meeting held on the 29th September 2023.

Minutes:

The Committee approved the minutes of the previous meeting held on the 29th September 2023. 

3.

Grant Thornton Progress Report pdf icon PDF 3 MB

The Committee is asked to note the report.

Minutes:

Julie Masci, Director, Grant Thornton presented the report, which detailed the progress Grant Thornton (GT) had made in delivering their responsibilities as the external auditors. 

 

Members were advised that an escalation policy was now in place and this had improved the turnaround time, which resulted in good progress being made.  It was noted that GT were on target for the extra-ordinary meeting on the 1st March 2024. 

 

The Director of Finance informed committee that the new SAP System would be in place for the new financial year and it would help to resolve some of the issues raised.  Members remarked over the delay in the installation of SAP, officers explained it was better to delay in order to get it right. 

 

In response to a question relating to the impact of flooding, members were advised that GT considered the value of properties, maintenance costs, etc. and that climate change agenda was part of the assessment. 

 

The Committee were advised that the valuation of the pension fund liability was the responsibility of the Pension Committee, as the actuary considered numerous factors.    Overall GT felt that the Pension Fund was in a good position and had positive challenge. 

 

Resolved

 

That the report be noted.

 

4.

Treasury Management Strategy pdf icon PDF 771 KB

To consider, and comment as appropriate, on the proposed strategy for 2024/2025.

Minutes:

Gareth Rees, The Head of Financial Management advised committee that the report addressed guidance from CIPFA and the Department for Levelling Up, Housing and Communities which required councils to produce:

-          A Capital Strategy;

-          A Treasury Management Strategy; and

-          An Investment Strategy covering non-treasury investments.

It was explained as in previous years, these strategies would form sections of the Medium Term Financial Strategy which would be presented to Cabinet on 31st January, and then for approval at Full Council on the 21st February.

The Treasury Management Strategy and Investment Strategy was submitted to the Audit and Governance committee to monitor and scrutinise the Council’s Treasury Management policy and practices.

 

Members noted at paragraph 21 the report quoted projections from the Authority’s Treasury Management Advisor that the Bank Rate had now peaked at 5.25%, with rates expected to begin to fall during 2024.

 

The report highlighted the financing implications of the Council’s capital programme, as this underpinned the Capital section of the MTFS documentation which would be approved by Council in February. Some of the key figures highlighted showed planned capital expenditure of £200.5 million for 2024/25. 

 

In terms of the Treasury Investment Strategy, the CIPFA Code required GCC to invest its treasury funds prudently, and to have regard to the security and liquidity of its investments, before seeking the highest rate of return.

 

Members attention was drawn to the council’s Responsible Investment Policy, Environmental, Social and Governance Considerations at page 40 of the report. It was noted following a query at Corporate Overview and Scrutiny Committee earlier this month, the Council Motion of November 2019 was reiterated in respect of the Responsible Investment Policy. Members welcomed the motion from 2019 but were concerned at the timeline. 

 

The Non-Treasury Investment Strategy, set out in paragraph 86 GCC’s three broad purposes for investing money. This section of the report focused on the investments which support local public services, and those to earn investment income.

 

The Head of Financial Management drew member's attention to page 46/ paragraph 103 of the report, where guidance required GCC to make an annual statement of its Minimum Revenue Provision. This was the amount charged to the revenue budget for the repayment of debt.

 

During the discussion, a member suggested that the strategy could give the option of moving away from fossil fuel exposure.  The Committee recognised it was not possible to make the recommendation to Cabinet at this stage, as this information was not available but due consideration should be given for next year.  Officers explained that the committee could recommend a no exposure to fossil fuels in the future, although information would need to be collated as to the potential loss of disinvestment.  The Committee requested that the information for disinvestment and its impact be presented to a future meeting for consideration.  (Action GR)

 

In response to a question relating to the Social element of ESG, it was explained that the Pension Fund could exert the greatest influence given the value of  ...  view the full minutes text for item 4.

5.

Internal Audit Activity Progress Report. pdf icon PDF 150 KB

The Committee is asked to note the report. 

Additional documents:

Minutes:

Piyush Fatania, Head of Audit Risk Assurance (ARA) presented the report which informed members on the progress of the internal audit activity in relation to the 2023/2024 Internal Audit Plan and provided a progress report on the internal audit outcomes from the period October to December 2023.

 

Members welcomed the counter fraud report and suggested that the findings should be publicised in an effort to raise public awareness. 

 

During the discussion the committee requested a column be included to reflect the level of priority.  Members wondered at what point was something escalated, the Head of ARA explained that Senior Auditors attended Senior Management Team meetings and sought assurance.  If necessary, the Head of ARA could raise areas of concerns directly with the Executive Director. 

 

It was explained that members could request Internal Audit to look at any areas of concern and the draft Internal Audit Plan would be presented to the April meeting for consideration.  The Committee was advised that the current Internal Audit Plan was on track. 

 

In response to a question, it was noted that a management action from th  West Cheltenham Transport Scheme audit had been delayed due to the implementation of SharePoint. 

 

 

Resolved

 

That the report be noted. 

6.

Anti Money Laundering Regulations and Guidance pdf icon PDF 58 KB

The Committee is asked to note the report and agree the recommendation. 

Additional documents:

Minutes:

The Director Finance advised the Committee that under the Proceeds of Crime Act 2002 (amended by the Criminal Finances Act 2017), Money Laundering Regulations 2017 and Terrorism Act 2000 the Council was required to establish internal procedures to prevent money laundering. The policy was last approved by the Committee in April 2018.

 

Members noted that Internal Audit and Strategic Finance had worked together to produce an Anti-Money Laundering Policy to raise awareness within the organisation of the responsibilities of all employees as well as providing guidance on how concerns should be raised (attached at appendix A).

 

In response to a question, the committee were advised if any issues that were picked up by the Counter Fraud Team they would liaise with the Police and information was shared across the council network. 

 

Resolved

 

That the Committee noted that there had been no disclosures to the Council’s Money Laundering Reporting Officer in last 24 months.

 

That the Anti Money Laundering Policy was reviewed but no changes were required to the policy approved in April 2018.

 

That the Committee agreed that the report would be considered by the Audit and Governance Committee every two years (Jan 2026).

 

7.

Exclusion of the Press & Public

That in accordance with Section 100 A (4) of the Local Government Act 1972 the public be excluded from the meeting for the following agenda items, because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 of Part 1 of Schedule 12 A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

 

Minutes:

Resolved

 

That in accordance with Section 100 A (4) of the Local Government Act 1972 the public be excluded from the meeting for the following agenda items, because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 of Part 1 of Schedule 12 A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

 

8.

Exempt Minutes of the previous meeting

The Committee is asked to approve the exempt minutes of the  previous meeting held on the 29th September 2023.

Minutes:

The Committee approved the exempt minutes of the meeting held on the 29th September 2023. 

9.

Exempt Internal Audit Progress Report

The committee is asked to note the report. 

Minutes:

Resolved

 

That the Committee noted the key findings of the consultancy review.