To receive apologies from members of the committee unable to attend.

No apologies were received.

Cllr Cardy declared a personal, non-pecuniary interest in Item 5, Nomination Rights, by virtue of his appointment as Director on the board of Richmond Housing Partnership.

To approve the minutes of the meeting held on 19^th November 2012 attached.

The minutes of the meeting held on 19 November 2012 were agreed as an accurate record of proceedings and the Chairman authorised to sign them.

No representations from members of the public had been received.

To summarise the progress made with respect to the implementation of the Nomination Rights recommendation, following the update made to the Audit Committee meeting in November 2012.

Report of the Joint Heads of Internal Audit and Investigations attached.

Having reported he was a Director on the Board of the Richmond Housing Partnership Cllr Cardy stood down to avoid the appearance of bias. Councillor O’Malley took the Chair for this item.

The Committee received a report of the Joint Heads of Internal Audit and Investigations which provided a progress update of the implementation of the outstanding Nomination Rights recommendation.

Joint Head of Internal Audit and Investigations, Diana Neaves, was in attendance to present the report and explained that although progress had been made, it was not fully implemented. There was a current pilot with two of the main housing associations, with a target to make formal arrangements with all housing associations by April 2013. The arrangements would formalise the nomination process currently in operation, providing a legal framework on which to fall back should problems ever arise.

In response to questioning from the committee, it was heard that the current work with the two housing associations would test for contentious issues in the proposed agreements. All housing associations should already be doing what is specified in the agreements and following the completion of the pilot it was anticipated that all remaining housing associations would sign up to the new arrangements.

It was RESOLVED that:

1.    The report be NOTED

2.    The Committee would follow-up on implementation progress at the next meeting if it remained ongoing.

The Committee received reports of the External Auditors summarising the findings of the 2011/12 certification work, updating on the progress of Grant Thornton as External Auditors and agreeing the 2012/13 fees for External Audit services.

The Audit Manager, Sarah Ironmonger, and District Auditor, Paul Grady, were in attendance to present the reports. The Committee was advised that there were no significant areas to which attention needed to be drawn and amendments totalled only £3,478 against the total of £154m. The 2012-13 work had been started and initial risk assessment was in progress.

In response to questioning from the committee, it was heard that the areas certified are the only areas required for external certification as decided by central government and that the main audit would cover the wider systems. The 40% reduction in fees would not affect the quality of service and was due to a number of factors including:

·      a reduction in the number of schemes requiring certification

·      lower overhead costs of the down-sized Audit Commission

·      outsourcing in-house practices to private suppliers with a larger market share which enabled economies of scale and meant that auditors would complete other tasks during quiet periods

·      more efficient and streamlined IT software that improved backend processing

Any further changes in financial accounting standards were not expected at the same scale as in past years which would be a barrier to proposed timescales.

It was RESOLVED that:

1.    The report be NOTED.

The Committee received a report of Graham Russell, Assistant Director of Finance and Corporate Services which provided an update on the potential impact of the Government’s welfare reform programme on the borough and the associated risks.

Mr Russell was in attendance to present the report and advised that some areas of risk could have a cumulative impact on individuals. The relationship between the welfare reforms and the trend in bed and breakfast expenditure would need to be monitored. The uncertainty of the definition of exempt properties in relation to Social Care meant that the full risk was unknown. The impact of the Council’s proposals for Council Tax Support was likely to be less severe than a number of other authorities.

In response to questioning by the committee it was heard that the Council may be better placed to deal with under occupancy implications than other authorities. The increase in the ‘discretionary housing payments’ fund would allow some temporary assistance to be provided, although it should be stressed that this was not a permanent solution. Further thought needed to be given to the possibility of fraud and information sharing with the National Fraud Initiation and Housing Associations.

Social Fund applications would be dealt with only by telephone and internet.  However staff would be available to help individuals on site in the Civic Centre. It was noted that the intention is for Universal Credit claimants to apply online.

It was RESOLVED that:

1.    The report be NOTED.

2.     

The Committee RESOLVED to reorder the agenda to take item 7b after item 8.

The Committee received a report of the Head of ICT which provided an overview of the Information Governance in the Council and the associated risks.

The Head of ICT, Adrian Boylan, and the Assistant Director of Finance of Corporate Services, Mike Gravatt, were in attendance to present the report and explained the common data breach risks, technical measures in place and the importance of achieving the correct balance between the risks and practical levels of safeguarding. It was important to avoid the higher penalties imposed by the Information Commissioner’s Office (ICO) by ensuring that staff were aware of both the financial risks and the risk of causing harm to individuals.

In response to questioning by the committee, it was heard that:

Information transfer involved in the increased levels of service commissioning was covered under the Information Sharing Protocol currently in place. The cross-organisation Information Governance Group allocated actions according to the Council’s procurement forward plan however it was identified that this practice could be improved by implementing follow-up actions to ensure that the protocol was executed properly in each case.

The ICO was concerned data on identifiable living people, and not whether data was “commercially sensitive” and recognised that the actions of the authority were appropriate in a recent case of intentional data misuse. The Director of Finance and Corporate Services was usually informed immediately of data breaches, particularly serious incidents, in addition to quarterly reports.

There was also a discussion about the awareness of appropriate data sharing and the high level of controls that could cause potential difficulty in particular cases e.g. protection of vulnerable individuals.

The committee proposed refresher information governance training for all members following a discussion about the provision and use of Council resources, including issues with Council email accounts and the responsibility of members as registered data controllers.

It was RESOLVED that:

1.    The report be NOTED.

2.    Further information governance training be offered to all members.

The Committee received a report of the Deputy Leader and Cabinet Member for Resources presenting the key Treasury Management documents for 2013/14 and explaining the risks inherent in treasury management.

The Head of Capital Finance, Coral Baxter, was in attendance to present the report and gave details about the assessment of counterparties and the implications of Achieving for Children becoming an independent company on 1^st October and the conversion of schools to academies on funding and investment totals. Further training to all members was also offered.

In response to questioning by the Committee, it was heard that delegated investment authority to officers had limits, processes and control as specified in the Treasury Manual. Some future long-term borrowing to fund the Corporate Programme could be done in advance to avoid possible rate raises which would be offset by the cost of holding the money. The Council is currently within the borrowing limits it sets for itself using the Prudential Indicators with an increasing need to borrow due to the Capital Programme.  There is a trigger interest rate set at 3.8%, and new borrowing should be considered if loans are available at or below this level.   Borrowing levels and current interest rates are also reviewed at monthly monitoring meetings.

The committee discussed the implications of borrowing at the current interest rate and the unpredictability of the market.

It was RESOLVED that:

1.    The report be NOTED.

2.    Further training sessions be offered to all members.

To decide having regard to the particular nature of the business to be transacted, whether or not to exclude the Press and Public during consideration of the following items on the grounds that they were likely to disclose exempt information by virtue of Paragraph 1 of schedule 12 A (as amended) to the Local Government Act 1972.

It was RESOLVED that:

Having regard to the particular nature of business to be transacted during the consideration of Item 22 that it was likely to disclose exempt information by virtue of paragraph 3, as defined in the Access to Information Procedure Rule 10.4 and of Schedule 12A of the Local Government Act 1972, the press and public be excluded.

To provide a brief summary of the investigation into the conduct of an employee (A), details of the key controls that were either bypassed or not working and a summary of the key recommendations made to improve controls.

The Committee received an investigation report from the Joint Heads of Internal Audit and Investigations.

It was RESOLVED that:

1.    The report be NOTED.

2.    Thanks be extended to all those involved in the investigation.