Agenda and draft minutes

Audit & Governance Committee - Thursday, 31st October, 2024 6.30 pm

Venue: Council Chamber, Town Hall, Katherine Street, Croydon, CR0 1NX

Contact: Hannah Cretney, Democratic Services  Email: hannah.cretney2@croydon.gov.uk

Media

Items
No. Item

103/24

Disclosure of Interests

Disclosure of Interests Members and co-opted Members of the Council are reminded that, in accordance with the Members’ Code of Conduct and the statutory provisions of the Localism Act 2011, they are required to consider in advance of each meeting whether they have a disclosable pecuniary interest (DPI), some other registrable interest (ORI) or a non-registrable interest (NRI) in relation to any matter on the agenda. If advice is needed, Members should contact the Monitoring Officer in good time before the meeting. If any Member or co-opted Member of the Council identifies a DPI or ORI which they have not already registered on the Council’s register of interests or which requires updating, they must urgently complete the disclosure form which can be obtained from Democratic Services at any time, copies of which will be available at the meeting for return to the Monitoring Officer.

Members and co-opted Members are required in general to disclose any relevant DPIs, ORIs or NRIs at the meeting –

·       Where the matter relates to a DPI they may not participate in any discussion or vote on the matter and must not stay in the room unless granted a dispensation.

·       Where the matter directly relates to the financial interest or wellbeing of an ORI they may not vote on the matter unless granted a dispensation.

·       Where a Member or co-opted Member has an NRI which directly relates to or affects their or a relevant person’s financial interest or wellbeing, whether they can participate in any discussion or vote on the matter or stay in the room depends on the detailed rules in paragraphs 7 of Appendix B of the Members’ Code of Conduct.

The Chair will invite Members to make their disclosure of interests orally at the meeting and they will also be recorded in the minutes.

 

Minutes:

There were none.

104/24

Minutes of the Previous Meeting pdf icon PDF 144 KB

To approve the minutes of the meeting held on 19 September 2024 as an accurate record of the proceedings.

Minutes:

The minutes of the meeting held on 19 September 2024 were approved as an accurate record of proceedings.

105/24

Urgent Business (if any)

To receive notice of any business not on the agenda which in the opinion of the Chair, by reason of special circumstances, be considered as a matter of urgency.

Minutes:

There were none.

106/24

Committee Action Log pdf icon PDF 66 KB

To receive the updated Committee Action Log.

Minutes:

Dave Phillips, Head of Internal Audit advised the Committee of the approach towards compliance improvement around Internal Audit as detailed within the action log update. The Committee discussed the provision of further data around longstanding and unimplemented Internal Audit actions. It was agreed that this data would be made available in the next Internal Audit Progress Report and that officers would discuss the format and content of this in preparation for the report. 

 

It was advised an Internal Audit focus week has been undertaken by the Corporate Management Team (CMT) and that following the previous committee meeting in October 2024 the Independent Chair had attended the council's Statutory Officers Board meeting and the Committee’s concerns regarding Internal Audit performance had been raised. Officers advised that CMT were aware of the Committee’s concerns and had been focusing on clearing the backlog of Internal Audit actions and making improvements.

 

Councillor Jason Cummings, Cabinet Member for Finance noted it was positive to see the committee driving performance improvements within the council.

107/24

Committee Work Programme 2024/25 & Committee Assurance Mapping Document pdf icon PDF 99 KB

This report sets out the process undertaken to develop the Audit and Governance Committee’s 2024/25 work programme and supports the delivery of the following recommendation from the Improvement and Assurance Panel; ‘To set 2024-25 work programmes for Scrutiny & Overview Committee and for Audit & Governance Committee, to be prioritised based on the Council’s Forward Plan and Risk & Opportunities respectively.’

 

Additional documents:

Minutes:

The Committee considered the updated Committee Work Programme 2024/25 and Committee Assurance Mapping Document.

 

The Audit and Governance Committee RESOLVED:

 

2.1 To note the approach taken to develop the Audit & Governance Committee’s work programme for 2024/25 in line with the Improvement and Assurance Panel’s recommendation.

 

2.2 To consider and approve the Audit & Governance Committee’s Work Programme for 2024/25, Appendix A.

 

2.3 To identify any other items that the Committee require to be added to the Work Programme for 2024/25.

 

2.4 To note the Committee’s Assurance Mapping Document, Appendix B

108/24

Financial Statements / Accounts Update: 2020/21 Audit Findings Report pdf icon PDF 111 KB

This report presents the Audit Findings Report on the 2020-21 Statement of Accounts and an audit progress report and sector update from the external auditors (Grant Thornton UK LLP).

 

Additional documents:

Minutes:

Jane West, Section 151 Officer and Corporate Director of Resources provided an update on the 2019/20 financial accounts. The council was collating a pack of information for sign off by the Improvement and Assurance Panel (IAP) ahead of submission to MHCLG, to agree the council's capitalisation direction. Officers had discussed the process with MHCLG and it was hoped the sign off would come relatively quickly. It was noted the Committee had delegated authority to the Corporate Director and Independent Chair of the Audit and Governance Committee to submit the letters of representation. Due to the outstanding Kroll report the external auditors would not provide a certificate for the 2019/20 accounts, however the council would be in a good position to have a finalised and audited set of 2019/20 financial statements. 

 

Allister Bannin, Deputy Section 151 Officer and Director of Finance noted the introduction of the government backstop for local authority auditing of accounts. Accounts up to 2022/23 now had an audit deadline of 30 December 2024. This had meant the council had decided to cut short the audit work for 2020/21 and the report detailed the work completed.

 

Updated accounts for 2020/21 would be received at the next meeting of the Committee for approval, along with the management letter of representation and the disclaimer audit opinion. The draft 2021/22 accounts had been published today on the council's website, which allowed for public inspection before the backstop date in December. These would also be brought to the following meeting for approval. 

 

Stuart Frith, Grant Thornton introduced the report noting owing to the government backstop the external auditors were required to report on the progress made to date. A summary of key points as set out in Section 2: Financial Statements of the report was provided and it was noted that whilst the audits were not complete, some assurances could be taken from the findings. 

 

The Committee queried where in some cases no evidence was provided or available, whether this was due to officers being obstructive or due to time constraints. Concerns were raised around the gaps in information. 

 

Grant Thornton advised in some cases the auditors had run out of time due to capacity and in others, the Finance Team had sought information which had not come back quickly in part due to changes in council staff. It was not felt that officers had been obstructive. 

 

Issues identified in the 2019/20 accounts and the subsequent high inherent risk had informed the requirement for a higher audit sample size. Officers reassured the Committee of the transparent approach taken and that where information was unavailable, this was often due to staff turnover. 

 

The intention to ensure the completion of a full audit for 2024/25 following the backstop was noted. 

 

The Committee noted the situation was due to the government's legislation and queried the value added by the completion of historical external audits for both the organisation and Croydon residents. It was also asked what role the Committee would play in scrutinising the ‘backstopped’  ...  view the full minutes text for item 108/24

109/24

Scrutiny & Overview Committee Annual Report pdf icon PDF 110 KB

In accordance with Part 4A of the Council’s Constitution, Council can receive Annual Reports from Committees. The Constitution also prescribes how these Annual Reports are treated by Council.

 

Appended to this report is the Annual Report from the Scrutiny & Overview Committee, which summarises the work of the Committee and its four Sub-Committees, namely Children & Young People Sub-Committee, Health & Social Care Sub-Committee, Homes Sub-Committee and the Streets & Environment Sub-Committee, during the 2023 – 2024 municipal year.  This was presented to Full Council on 9 October 2024.

 

The report is now presented to the Audit & Governance Committee for its information.

 

Additional documents:

Minutes:

Councillor Leila Ben-Hassel Chair of Scrutiny and Overview Committee introduced the report and advised that during the previous year the Scrutiny and Overview Committee had focused on the council's finances, scrutinising the council’s 2023/24 in-year financial position and development of the 2024/25 budget. Several deep dives had been undertaken by the Scrutiny Sub -Committees and Transformation had also been a key area for the Committee. It was noted the council's Adult Social Care department had managed demand well. Scrutiny had also looked at the councils Equalities strategy, People and Cultural Transformation strategy and the Tackling violence against women and girls delivery plan. 

 

The council’s challenging in-year financial position was noted, both in light of pressure to close the overspend gap and balance the 25/26 budget. The continued use of capitalisation direction had demonstrated the continuing fragile financial position and raised concerns around service delivery.

 

Looking forward, it was the intention for the council’s Scrutiny function to engage in strategic work earlier in the process. 

 

The Committee noted the strengthening joint working between the Audit & Governance Committee and Scrutiny, in line with recommendations from the external auditors. Thanks were extended to the Chair of Scrutiny and Overview Committee for their attendance. 

 

Councillor Jason Cummings, Cabinet Member for Finance advised the effective Scrutiny and Audit Committee structures now in place at Croydon had been shared with the other local authorities at a recent LGA training event.

 

It was suggested that the Chair of Scrutiny and Over Committee could join the Audit & Governance Committee’s March 2025 meeting when it would consider the 2025/26 Committee Work Programme, Internal Audit plan and Risk Management Strategy. 

 

In response to questions, it was advised the two Chairs intended to meet on a quarterly basis.

 

The Audit & Governance Committee RESOLVED:

 

1. To note the Annual Report of the Scrutiny & Overview Committee.

110/24

Oracle Improvement Programme Update pdf icon PDF 85 KB

The purpose of this report is to update the Audit and Governance Committee on the progress of the work undertaken on the Oracle Improvement Programme.

 

To provide the Committee with information and a demonstration highlighting latest improvements to the design and function of the Oracle system.

 

Additional documents:

Minutes:

Alan Layton, Senior Responsible Officer for the Oracle Improvement Programme introduced the report noting the Committee had previously requested an update on the improvements and officers were present to provide demonstrations of the new systems.  

 

Officers provided presentation demonstrations of the HR, Expenses and Supplier Self-Registrations modules within Oracle. 

 

The Committee thanked officers for their demonstrations of the system improvements.

 

In response to questions, it was advised two step authentication security was in place for suppliers to log into their account. 

 

The Committee noted the risks identified regarding staff not using the system correctly and queried whether any work had been done to identify people circumventing systems on purpose. Offices advised the approach had been to adopt not adapt and it was the intention to fully adopt best practice with no customisation.

 

The Committee queried the implementation timeline for the programme and whether a support helpline was available for users. It was also asked what control arrangements were in place around registration and if there were processes to remove company data from the system when no longer required.  

 

Officers advised the key milestones within the programme were set out in the highlight report, with implementation taking place in waves until December 2025. Progress and compliance would be monitored via key performance indicators (KPIs) and would identify any further training needs. 

 

Data cleansing work was included in the Procurement and contract management improvement programme and this would be ongoing. The need to ensure the system was kept up-to-date and the data clean was noted.

 

It was the intention to introduce payment limits to suppliers, in line with contract values to manage risks.

 

Dedicated change managers within the Oracle steering group were leading on staff communications and training. Each module demonstrated at the meeting was now live, with new functionalities being implemented on an approximately 12-weekly basis. A lunch and learn session had taken place around the new HR module functionalities and had attendance of 350 staff. 

 

The Committee requested ongoing monitoring and reporting of cultural change, particularly in regard to appraisals. Officers advised of the intention to introduce all recruitment processes including appraisals into the Oracle system, as part of the next phase of improvements due to be completed by June 2025. Increased return to work meeting completions had already been realised following the introduction of the sickness reporting functionality.

 

In response to a question about the reliability of the systems, it was advised improvements to functionality ensured for no down time, for example managers were now able to log staff sickness throughout the month.

 

It was questioned how the Oracle improvement work was aligned with the council’s Housing transformation and improvement work and also how the Committee could seek assurance around shifting culture. 

 

Officers advised KPI dashboards to monitor and report data from the system were being developed and could be reported in future to the committee to demonstrate financial, cultural and compliance improvements. The Committee welcomed the introduction of data dashboards noting previous challenges and collating this information. 

 

Councillor  ...  view the full minutes text for item 110/24

111/24

Dedicated Schools Grant Deficit Management Plan Update

This report provides some important updates regarding the Dedicated Schools Grant (DSG) Deficit Management Plan, which has been in place since 2019/20. A Deficit Management Plan is required as a grant condition of the DSG grant where an authority has a DSG deficit position. The management plan is being implemented successfully; however, there is a level of risk from increasing numbers of Children and Young People with complex Special Education Needs.

 

The report focuses on the overall performance of the DSG Deficit Management Plan against key qualitative and quantitative performance metrics set for the 2023/24 financial year, as well as providing the final outturn of 2023/24.

Additional documents:

Minutes:

Shelley Davies, Director of Education introduced the report, advising the council remained on track in relation to the in-year budget as set out in Table 1 of the report. The approach to support for children with special educational needs and disabilities remained focused on early intervention and increasing provision within the borough. 

 

The Committee welcomed the progress made and asked what risks existed outside of the council's control that could impact the programme. Officers advised demand from children who may come into the system was difficult to predict. Also increases to costs for independent schools outside of the borough and the instances where provision was not available within the local authority. However, these risks were factored into the plan and strategy of early intervention and increased provision in the borough. Collaboration with neighbouring local authorities also helped to ensure there were ceiling costs in place for out of borough independent school places. It was noted that the service was ahead of targets for 2024/25. 

 

Councillor Jason Cummings, Cabinet Member for Finance commended the good work done by the department and advised of a potential national push by government to utilize the increase SEND budget to mitigate the DSG position. The council needed to remain aware of this to ensure it was not disadvantaged by having undertaken work to rectify the DSG position. Figures from the LGA stated the cumulative deficit was currently £3.2 billion and expected to rise to £5 billion by 2026. 

 

The Audit & Governance Committee RESOLVED to note:

 

a) The key performance targets set under the DfE Safety Valve (SV) agreement.

 

b) The overall performance of the Deficit Recovery Plan against the target (including the 2023/24 outturn) and challenges and delivery risks.

 

c) The impact of the required accounting treatment in respect of the DSG deficit as detailed in section 7.

 

d) The risks highlighted in paragraphs 8.2 to 8.7.

 

112/24

Exclusion of the Press and Public

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”

Minutes:

This was not required.

113/24

Minutes of the Previous Meeting (Part B)

To approve the Part B minutes of the meeting held on 19 September 2024 as an accurate record.