Democracy

Agenda and minutes

Venue: Council Chamber

Contact: Susan Lightwing 

Items
No. Item

21/31

Welcome and Evacuation Procedure

Minutes:

The Chair welcomed all present and read out the Building Evacuation Procedure.

21/32

Declarations of Interest

To receive any declarations of interest.

Minutes:

There were no declarations of interest received at this point in the meeting.

21/33

Minutes - Corporate Affairs and Audit Committee - 25 November 2021 pdf icon PDF 209 KB

Minutes:

The minutes of the Corporate Affairs and Audit Committee meeting held on 25 November 2021 were submitted and approved as a correct record.

 

21/34

Internal Audit and Counter Fraud Progress Report pdf icon PDF 154 KB

Additional documents:

Minutes:

A report of the Head of Internal Audit was presented to provide Members with an update on progress with the delivery of internal audit and counter fraud work and on reports issued and other work completed since the last update report to this Committee.

 

A copy of the Internal Audit Progress Report was attached at Annex 1 to the submitted report and reported on progress against the internal audit work programme.   A summary of current work in progress, internal audit priorities for the year, completed work, and follow-up of previously agreed audit actions was included.   Four final reports had been issued since the last Committee meeting and a summary of the key issues was listed at Appendix 3 to the submitted report. 

 

It was suggested that some indicative timescales for completion of current and forthcoming work could be added to future reports.

 

Agreed Audit Actions that were outstanding for more than six months were listed at Appendix 5 to the submitted report, with an explanation of the reasons for the delay.

 

A copy of the Counter Fraud Progress report was attached at Annex 2 to the submitted report and reported on progress against the counter fraud work programme.  A range of work was detailed including activity to promote awareness of fraud, work with external agencies, and information on the level of fraud reported to date.

 

Veritau had noted an increase in both regional and national attempts by organised criminals operating from overseas to divert genuine payments made to council suppliers (mandate or payment diversion fraud). The counter fraud team was working with the Council to ensure that controls were in place to meet this emerging threat.

 

In 2021/22, the counter fraud team had received seventeen referrals of suspected fraud.  These covered potential adult social care fraud, internal fraud, and debt recovery.  There were currently six cases under investigation. Working with Legal Services the team had assisted in tracing three people who owed the council over £10k.  A further four cases were ongoing trying to trace debtors who owe the Council a combined total of £15k.

 

It was confirmed that the audit report on Project Management - Boho X would be presented to the next meeting of the Corporate Affairs and Audit Committee. 

 

AGREED that the report was received and noted.

21/35

Community Governance Review pdf icon PDF 334 KB

Additional documents:

Minutes:

A report of the Head of Democratic Services was presented to seek the Committee’s agreement to proposed Terms of Reference and consultation documents to enable a Community Governance Review to commence in Middlesbrough.

 

At the Council meeting held on 28 July 2021, consideration and agreement of Terms of Reference for the Community Governance Review, and consideration of any consultation responses, was delegated to the Corporate Affairs and Audit Committee.  Recommendations would be referred back to Council for approval.

 

Guidance issued by the Secretary of State and the Boundary Commission.   Indicated that it was good practice for Councils to consider conducting a Community Governance Review every 10 to 15 years.   Middlesbrough’s last Review was undertaken fifteen years ago.  A request had been made by Nunthorpe Parish Council to reconsider its current boundaries and it was therefore considered timely to conduct a review of the whole of the Council’s area.  Any decisions to make changes to parish arrangements would be implemented at the next full parish elections in 2023.  It was proposed that Community Councils were included in the Community Governance Review, since they played an equally strong part in representing communities and acted as a mechanism for the Council to consult at a local level.

 

A Community Governance Review was a review of the whole part or part of the district area to consider one or more of the following:

 

a)   Creating, merging, altering or abolishing parishes;

b)   The naming of parishes and the style of new parishes;

c)   The electoral arrangements for parishes (the ordinary year of election; council size; the number of councillors to be elected to the council, and parish wards)

and

d)   Grouping parishes under a common parish council or de-grouping parishes.

 

The purpose of a Community Governance Review was to secure an arrangement that would bring about improved community engagement, better local democracy and result in more effective and convenient delivery of local services.

 

The Council had to consult the local government electors for the area under review and any other person or body (including a local authority) who appeared to have an interest in the review.

 

There were a number of requirements relating to the conduct of the review that had to be observed as follows:

 

  • Terms of Reference identifying the focus for the review and the area under review had to be drawn up.
  • Consultation had to take place with local people, representative groups active in the area, and any people/groups that could be reasonably expected to have an interest in the review.
  • The Council had to take account of the representations received;
  • The review had to be completed within twelve months of the Council publishing the Terms of Reference.

 

In order to ensure that interested persons or groups had the opportunity to input and respond to the review,  the following actions would be undertaken:

 

  • Display notices at a number of council buildings.
  • Information on the Council website.
  • Article in Middlesbrough News.
  • Members’ Briefings.
  • Letter to parish and community councils including information that  ...  view the full minutes text for item 21/35

21/36

Corporate Debt Write Off Policy pdf icon PDF 462 KB

Additional documents:

Minutes:

A joint report of the Executive Member for Finance and Governance and the Director of Finance was presented asking the Committee to consider a Corporate Debt Write Off Policy.

 

The purpose of this new policy was to provide a corporate approach to the writing off of bad and irrecoverable debts in a fair and timely manner, whilst seeking to maximise the opportunity for collection, thereby minimising the need for write off. 

 

All service areas would have to follow this policy to allow the Council to operate a consistent approach to debt write off, whilst having due regard to the customer’s ability to pay.  Whilst some parts of debt write off were governed by particular legislative requirements such as Council Tax, Business Rates, Adult Social Care Debt; wherever possible the overall principle of debt write off should be efficient and effective, and always give consideration to the financial impact on the Council when debt was written off.

 

This policy would underpin any specific recovery strategies and be applied across all directorates.  The policy would also support cross directorate communication where a shared customer base existed.  It was envisaged that the approach would work within Data Protection legislation, and should be considered at a corporate level to reduce multiple officer engagements across directorates with the same resident and or business base.

 

The introduction of a Corporate Debt Write Off policy was part of the Council’s strategic direction, and as such required executive consideration followed by Council approval.  The Council had a statutory duty to collect outstanding debt and did so in accordance with the Local Government Finance Act 1992 and the Council’s Financial Procedure rules.  The introduction of this policy would support this duty and also ensure that the Council’s debt write off approach/methods were consistent, fair and efficient across all of its services.

 

This was the third of four policies being developed that brought together a significant number of supporting arrangements that would not only complement,  but enhance the Councils social regeneration plans:

 

  • Vulnerability Policy - (Executive Approval on 16.6.2020).
  • Corporate Debt Management Policy (Single Executive Approval on 10.08.21).
  • Corporate Welfare Policy (currently in design).

 

The policy set out a framework for a consistent approach to write off by delegating debt levels to various Managers/Heads of Service where the aim was to enable cases that fitted specific criteria (contained within the policy) to be written off, which would in turn enable the more efficient collection of outstanding debt.  The policy also sought to address other matters such as credit balance write offs and the reinstatement of previously written off debt.

 

The policy applied to all debts owed/due to the Council and the general principles adopted in the policy were as follows:

 

  • To ensure a professional, consistent and timely approach to debt write off across all of the Council’s functions.
  • Where Data Protection legislation permitted, to promote a coordinated approach towards sharing debtor information internally and managing multiple debts owed to the Council.
  • To ensure that  ...  view the full minutes text for item 21/36

21/37

Capital Strategy for 2022/23 pdf icon PDF 639 KB

Minutes:

The Chair proposed that consideration of this report was deferred to the next meeting until Members had received further training on capital strategy.

 

AGREED that Agenda Item 8 was DEFERRED.

21/38

Appointment of External Auditors pdf icon PDF 380 KB

Minutes:

A report of the Director of Finance was presented to consult with Members of the Corporate Affairs and Audit Committee on the Council’s future external audit arrangements.  The submitted report considered the options available and asked Members to endorse a preferred way forward for recommendation to Executive and Council, if required.

 

The current auditor appointment arrangements covered the period up to and including the audit of the 2022/23 accounts.  The Council opted into the ‘appointing person’ national auditor appointment arrangements established by Public Sector Audit Appointments (PSAA) for the period covering the accounts for 2018/19 to 2022/23.

 

PSAA was now undertaking a procurement for the next appointing period, covering audits of the accounts for the financial years, 2023/24 to 2027/28. During autumn 2021, all local government bodies need to make important decisions about their external audit arrangements from 2023/24.  They had options to arrange their own procurement and make the appointment themselves or in conjunction with other bodies, or they could join and take advantage of the national collective scheme administered by PSAA.

 

Details of the options available were set out in the submitted report.  If the Council did not opt in to the national scheme, there would be a need to establish an independent auditor panel to make a stand-alone appointment. The auditor panel would need to be set up by the Council itself, and the members of the panel had to be wholly or a majority of independent members as defined by the Local Government Audit and Accountability Act 2014 (the Act).   Independent members for this purpose were independent appointees, excluding current and former Elected Members (or officers) and their close families and friends.   Elected  Members would not therefore have a majority input to assessing bids and choosing which audit firm to award a contract for the Council external audit.

 

Alternatively, the Act enabled the Council to join with other authorities to establish a joint auditor panel.  Again, this would need to be constituted of wholly or a majority of independent appointees.  Further legal advice would be required on the exact constitution of such a panel having regard to the obligations of each Council under the Act and the Council would need to liaise with other local authorities to assess the appetite for such an arrangement.

 

These would be more resource-intensive processes to implement for the Council, and without the bulk buying power of the sector-led procurement would be likely to result in a more costly service.  It would also be more difficult to manage quality and independence requirements through a local appointment process.  The Council would be unable to influence the scope of the audit and the regulatory regime would inhibit the Council’s ability to affect quality.  The Council and its auditor panel would need to maintain ongoing oversight of the contract.  Local contract management could not, however, influence the scope or delivery of an audit.

 

The national offer provided the appointment of an independent auditor with limited administrative cost to the Council.  By joining the scheme,  ...  view the full minutes text for item 21/38

21/39

Lessons Learned - Governance on Leasing our Commercial Assets pdf icon PDF 567 KB

Minutes:

A report of the Head of Strategic Commissioning and Procurement was presented to provide assurance to Corporate Affairs and Audit Committee that relevant governance processes and management were in place with regard to the leasing of commercial assets.

 

Following a complaint, a joint investigation was undertaken regarding historical leasing matters.  The investigation was initially conducted by Internal Audit, with a follow up, more in-depth review conducted by the Head of Service.  The subject matter of the review concerned the leasing of commercial space in Broadcasting House.  The lease in question commenced in 2013, it was extended in 2016 and due to the Covid-19 pandemic was continued twelve months post its termination date.

 

The subject of the review was value for money linked to the commercial terms of the lease.   The investigation concluded the following key points:

 

  • The advice of the Valuation and Estates Officer was not followed.
  • Lease terms were agreed at less than favourable rates due to the community benefit it offered.
  • Appropriate due diligence was not progressed or evidenced.
  • Decision makers did not make robust challenge when required.

 

Whilst community benefit was a legitimate reason for reduced rent levels, both in 2016 and currently, clear documented reasoning on the community benefit needed to be evidenced and recorded.  In this instance the review could not find any detailed explanations for the community benefit which was proportionate to the reductions provided.

 

It was documented that the Valuation and Estates Officer was clear in their recommendation regarding the levels of rent.  However this was not followed and senior management overruled the recommendations.

 

At the expiry of the lease, the favourable terms were not extended and commercial terms were offered.  This reflected management changes and the approach in practices towards commercial leasing.  The occupant was not in agreement with the significant increase in rent and subsequently sought alternative premises.

 

Assurance was provided that significant changes have been implemented which would preclude this issue from arising in current leasing practice. 

The Valuation and Estates Team were now managed within the Corporate Finance function.  The team was based within Strategic Commissioning and Procurement, and Had strong leadership through the Head of Strategic Commissioning and Procurement, reporting directly to the Director of Finance.

 

All leases for commercial assets were negotiated by valuation and estates staff for the majority of the asset portfolio.  The management of the Boho estates, Centre Square 1 and 2, and Tees Amp was undertaken by a team based within Regeneration, and Captain Cook Square management was currently externally commissioned.   In all cases, leases must be requested through Delegated Approval forms.  Legal Services would not progress instructions without the receipt of an appropriate signed Delegated Approval.  Currently there were three principal signatories for the delegated approval: Head of Valuation and Estates, Head of Strategic Commissioning and Procurement, and Director of Finance.

 

Predominantly all delegated approvals were processed by the Head of Valuation and Estates to ensure consistency of approach.  During periods of annual leave or sickness, the Head of Strategic Commissioning and  ...  view the full minutes text for item 21/39

21/40

Any other urgent items which in the opinion of the Chair, may be considered

Minutes:

None.