Agenda and minutes

Apologies had been received from Cllr S Penfold, Cllr E Spagnola and Cllr L Vickers.

There were no substitutes.

To receive public questions, if any.

None received.

To determine any items of business which the Chairman decides should be considered as a matter of urgency pursuant to section 100B(4)(b) of the Local Government Act 1972.

None.

Members are asked at this stage to declare any interests that they may have in any of the following items on the agenda. The code of conduct for Members requires that declarations include the nature of the interest and whether it is a disclosable pecuniary interest.

None.

To approve as a correct record, the minutes of the meeting of the Governance, Risk & Audit Committee held on 12 September 2023.

The minutes of the meeting held on 12^th September were approved as a correct record and signed by the Chairman.

Cllr C Cushing referred to Minute no.21 and a previous request for the Director of Finance (DFR) to provide a timeline for the sign-off of outstanding annual accounts. The DFR replied that she would send out a summary of key dates. In terms of the broader position, she said that all local authorities were waiting for guidance from the Government as to whether they wanted maximum assurance which would require the external auditors to come into each authority and catch-up on the accounts. For the 2021/22 accounts the deadline for this would 31 March 2024 and for 2022/23 it would be 30 September 2024 and for 2023/2024 it would be either December 2024 or March 2025. Any work that was not completed by these dates would stop which could lead to an incomplete Audit opinion. She went onto say that the alternative, which was the preferred option of External Audit, was to do a ‘reset’ as at 2023/2024 and this would mean that they would start afresh for 2023/24 and would not complete the 2021/2022 and 2022/2023 audits. The DFR added that councils still had to produce annual accounts for their own purposes and to provide an opening balance for the following financial year. Auditors were still required to undertake an audit on ‘Value for Money’ for all years and also on pensions accounts. The latter would be at County Council level rather than District level. She said that the Finance Team were continuing to undertake work on the 2021/22 accounts and were ready to produce the statement soon. She said that she believed that the Council would have caught up by the end of March 2024.

The Chairman thanked the DFR for the update and said that the main decisions relating to this had to be taken elsewhere. In reality, it was unlikely that Councils would receive the assurance that was required and that why the proposal for a reset was generally supported.

The Chairman referred to Minute 25 and the recorded action that the Head of Internal Audit (HIA) would seek a written response on outstanding audit recommendations where no comments had been received. The HIA replied that in her report that she had included all the responses that were received at the time and if future she would try and ensure that officers provided a response.

The Chairman then asked for an update on the co-option of an Independent Member to the committee (Minute 27). The Monitoring Officer replied she was intending to commence the recruitment process in the New Year so they could join the committee from the start of the municipal year.

The Chairman then referred to Minute 28 and the resolution to request that the Corporate Leadership team (CLT) give consideration to the inclusion of an AI risk on the Corporate Risk Register. He asked for an update on this. The MO replied  ...  view the full minutes text for item 38.

To review and note the External Auditor’s Annual Report for 2020/2021 and the accompanying Auditor’s certificate.

Cllr C Cushing said that there were some sizeable revaluations throughout the report and he asked whether these were likely to have a material impact, particularly in terms of the Council’s reserves. He also commented on the reference in the report to the February 2020 budget and queried the value that the Council was getting out of looking at figures that were nearly 4 years old now, with little focus on the intervening years. The DFR replied that she agreed with all of the recommendations set out in the External Auditor’s Annual Report 2020/2021 and they would all be implemented with the exception of the authorisation of journals which she felt was not necessary. Regarding the valuation, to some extent until they were realised or sold then it was essentially just a figure and there was no material effect on the bottom line. She added that the fixed asset register had been thoroughly reviewed now and proper up to date valuations were now in place.

The DFR went onto say that it was important that the Council continued to close the accounts for each year as though they were being audited so that members could be satisfied that the balances were true and fair going forward. The Chairman agreed that it was important that the Committee had that assurance. He added that the Value for Money section included in the report had not raised any concerns, which was reassuring. He added that he had contacted the County Council to arrange a discussion about pensions so that he has a better understanding of the implications for NNDC. He said that he would inform members of the outcome of these discussions and the Committee could decide if they wished to undertake training on the matter. The DFR added that if members were interested in any other areas of training, she was happy to make arrangements.

RESOLVED

To note the report.

The Head of Internal Audit (HIA) introduced the report. She explained that it examined the progress made between 1 September to 30 November 2023 in relation to the delivery of the Annual Internal Audit Plan for 2023/2024 and also provided details of any outstanding internal audit recommendations. She said that to date, 41% of the Audit Plan had been completed. During the latest period, two reports had been finalised – land charges and procurement and contract management. The details of these were set out in appendix 2. In terms of outstanding recommendations, 29 were outstanding of which 5 were urgent.

The Chairman commented on the 41% completion rate and asked whether the HIA had any concerns about achieving completion by the end of the year. The HIA replied that she would expect to be further on in the plan. The contractor was currently behind and some of these was due to staffing issues. They had advised the HIA that the plan would be completed by the end of March 2024.  In terms of next year, it was hoped that a protocol could be put in place to embed timescales.

Cllr Cushing referred to appendix 2 and the finding for the Land Charges searches and asked why it was a limited assurance rather than no assurance. He also said it would be useful to understand the materiality linked to this and whether it was a sizeable sum of money involved. The HIA replied that more information could be supplied to members on this. Cllr Cushing said that this would be helpful. The DFR said that regarding land charges income, in 2023/2024 the Council was budgeting for £175k. She added that the actual service was being transferred to the Land Registry so this would result in some loss of income. The Chairman asked whether, given the transfer of this work, it was pursuing this issue at all and how it would be monitored in the future. The Policy and Performance Manager said that some elements of the work relating to land charges would remain at NNDC.

It was proposed by Cllr J Toye, seconded by Cllr C Cushing and agreed that  a review is undertaken on how land charges are monitored and how this will be reported in the future.

Cllr Cushing then referred to Appendix 6 – ‘Outstanding Internal Audit Recommendations’ and said that when he compared them to the previous update report, it was clear that some of them had moved backwards. He gave NN2213, Waste Management as an example of having a revised due date. He asked the HIA what level of confidence she had in the outstanding recommendations being delivered. The HIA replied that regarding the first recommendation for NN2213, it involved other councils too so that was adding to the delay there and with the second one, it related to staff shortages and it was therefore difficult to predict when it would be resolved. The Chairman said that he shared Cllr Cushing’s concerns, particularly about the materiality  ...  view the full minutes text for item 40.

The Resilience Manager (RM) introduced this item. She said that she wanted to emphasise the work of the Flood Wardens who had been providing excellent support to the Council, in a volunteer capacity. She drew the following key issues to the committee’s attention:

-       The Norfolk Resilience Forum (NRF) – The Council paid an annual subscription to this body and it was important that this continued as the Council worked closely with the partner agencies involved. It was likely that the subscription would increase in future years but the figure was not yet know.

-       Risk Assessments – there had been several changes to the National Risk Register in August 2023 and the changes to the assessment methodology had increased the time now taken to assess each risk.

-       Mutual Aid Agreement – this had been revised in January 2023 and the new document set out arrangements for the provision of mutual aid during an emergency. All Local Authorities could now come together and assist each other when required.

-       Severe weather and flooding – The RM that the main challenge at the moment was flooding and a lot of her work in recent months had been dealing with flood related issues.  Work was ongoing on looking at long-term solutions to chronic flooding.

-       Flood defences at Potter Heigham – following the installation of replacement flood boards, the volunteer flood wardens at Potter Heigham had been providing updates on the extent of flooding and managing the flood boards on a daily basis. She said that their work and support had been invaluable, as had all of the flood wardens along the coast.

-       North Norfolk Safety Advisory Group – the removal of the Events Planning team at Norfolk Constabulary had led to a review of how events were managed across Norfolk, to ensure minimal disruption for the public attending.

The Chairman said that he would like to formally thank the flood wardens for

their hard work and support. He then thanked the RM for her hard work too.

The Chairman asked about the subscription cost for membership of the NRF and if there was any indication at all about the likely increase. The RM replied that there was not but that the NRF Board was aware of the funding challenges faced by its members and it was hoped that this would be taken into consideration.

Cllr C Cushing conveyed his thanks to the flood wardens for all their hard work. He asked the RM whether the past year had been a particularly bad year for severe weather events. The RM replied that a lot of people had commented on how bad this year had been. There seemed to be more incidents and they were lasting for longer. She added that as extreme weather events were a national problem, North Norfolk was often disadvantaged when it came to seeking funding support from Government. Priority, not unreasonably, was given to industrial and urban areas which were more heavily populated.

The Chairman  ...  view the full minutes text for item 41.

The Overview & Scrutiny Committee made the following recommendation to Governance, Risk & Audit Committee at the meeting on 15 November:

‘To request that Governance, Risk & Audit Committee reviews the risks presented by the Coastwise Project in respect of the likelihood and impact elements of the risk scores (pre and post the mitigation actions) so that there is clarity about how those actions will work and thus provide greater reassurance that they are being managed effectively and who owns them.’

The Chairman explained that this item had come to the Committee as a recommendation from Overview & Scrutiny Committee:

‘To request that Governance, Risk & Audit Committee reviews the risks presented by the

Coastwise Project in respect of the likelihood and impact elements of the risk scores (pre and post the mitigation actions) so that there is clarity about how those actions will work and thus provide greater reassurance that they are being managed effectively and who owns them.’

The Coastal Transition Manager (CTM) introduced this item. He explained that Coastwise was one of a small number of nationally funded coastal transition accelerator projects which were looking to work with communities in high risk coastal erosion areas to prepare transition plans and practical actions for the future. Approximately £15m of funding had been confirmed by the Environment Agency (EA) earlier in the year and, as required by the programme, governance arrangements had been set up and a risk register had been developed. It had originally been prepared as part of an outline business case to the EA to seek approval of the funding and this had been reviewed by the EA’s Large Project Review Group which made one addition to the register. It then went back to NNDC’s Coastwise Governance Board which undertook a risk workshop and consequently the scoring mechanism was updated and consolidated and added in any additional risks identified for Coastwise. In summary the top 5 risks were changes in Government direction, meeting the proposed financial projections, land availability for coastal transition, the consenting timeframes needed to deliver practical actions for transition and the impact of nutrient neutrality when moving residents into new properties. He then outlined the risks that had been mitigated down.

The Chairman invited members to speak:

Cllr C Cushing said that the overall register was quite detailed and the format was sufficient but although there was a description of the risk, there was no detail regarding the impact of it and it wasn’t clear what would happen if one of the risks occurred. He said that this additional information would help quantify the impact of the risk.

Cllr J Boyle agreed with Cllr Cushing and said it would be helpful to have additional information setting out the consequences of any risks. She commented on the risk that the allocated funding may not be spent within the required timescales and said that this caused some concern.

The Chairman said that it was a ‘living document’ which would change as the project progressed. All major risks had been identified and he did not see any others that needed to be included in this list. He also commented on the risk of being ‘unable to spend allocated funds in projected years’ and asked what would cause this. The CTM replied that when NNDC was developing the project assurance was given that the Council would not be held to the projections of allocated spending over the years of the programme. The EA then advised that they were now  ...  view the full minutes text for item 42.

To consider the Procurement Exemptions register.

The Monitoring Officer introduced this item. She explained that there was one exemption - regarding the contract for the supply of the Poverty Dashboard. The Chairman said that this was a specialised area and money well spent

To review and note the corporate risk register and consider any necessary recommendations.

The DFR introduced this item. She said that the register had been updated. Some had changed slightly but most had remained the same. The highest risk for the Council at the moment was financial sustainability.

Cllr C Cushing commented that the format was very poor. It was very lengthy but did not include much useful text. Again, he reiterated that it was not clear what actions would be taken to mitigate the risks. There was no detail supporting each score so it was not clear how the scores had been reached. He said that the format of the Civil Contingencies risk register was much better and he queried why the overall risk register could not be presented in the same format. The DFR replied that officers were currently in the process of producing the corporate risk register in a different format. She said it would be along the lines of the civil contingencies one. Cllr Cushing said that if it was just updated each time with key elements it would be much shorter and easier to access.

The PPM said that there were two issues, how it was presented and how historical data should be stored so that trends could be accessed. She added that there were some challenges around having a much shorter report but with members being able to drill down to any detail should they want to. The Chairman suggested that technology may be the best way to address this so that links could provide detail if required. He asked when it was likely that the review of the corporate risk register was likely to be undertaken. The DFR replied that she hoped that it would be in place for the start of the next financial year. Cllr Cushing requested that a ‘last updated’ column was included, adding that it was not the role of members to undertake a deep dive but to review the information in a constructive manner. The Chairman agreed and said that if members wanted more information on a specific risk then they should be able to ask for it. He asked whether any changes would meet internal audit requirements. The HIA said that she was happy to work with officers and have input into any changes to the risk register, adding that it was important for audit purposes to have a narrative at the start of the register.

The Chairman thanked everyone for their input. He said that it was important that members were happy with any changes and suggested that any proposals could be shared more widely. The DFR replied that it was part of a wider project to look at performance management, audit recommendations and the risk register and there was a project group in place to oversee this. She said that workshops could be incorporated into the review process and these could include members from both GRAC and Overview & Scrutiny Committee.

The Chairman referred to page 104 of the report and CRO24 – staffing issues in the People Resources  ...  view the full minutes text for item 44.

To review the Governance, Risk & Audit Committee Work Programme.

The Democratic Services Manager (DSM) updated the committee on the work programme. She advised that there were several policies that were due for review during 2024 and she would liaise with the relevant officers regarding programming them into the committee schedule.

The Chairman referred to the recent LGA Peer Review and the reference to a review of the roles and remit of Cabinet, Overview & Scrutiny Committee and GRAC to ensure that any overlap was minimised. The DSM said that there would be a review of the terms of reference of each committee and this would be done as part of the wider review of the constitution.

The Chairman commented that it would be helpful to have an update on the timelines of reports coming through as there was a lot of slippage.

To monitor progress on items requiring action from the previous meeting, including progress on implementation of audit recommendations.

The DSM provided an update on the Update and Actions list. The Monitoring Officer referred to Minute 28 ‘to request that CLT give consideration to the inclusion of an AI risk on the Corporate Risk Register’ and said that she would look into this as responsibility for information governance sat with her.

To pass the following resolution, if necessary:

“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 they involve the likely disclosure of exempt information as defined in paragraph _ of Part I of Schedule 12A (as amended) to the Act.”