Venue: COUNTY CHAMBER, COUNTY HALL, RUTHIN AND BY VIDEO CONFERENCE
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Members to declare any personal or prejudicial interests in any business identified to be considered at this meeting.
Notice of items, which in the opinion of the Chair should be considered at the meeting as a matter of urgency pursuant to Section 100B(4) of the Local Government Act 1972.
There were no urgent items raised.
To receive the minutes of the Governance and Audit Committee meeting held on 23 November 2022 (copy enclosed).
of the Governance and Audit Committee meeting held on the 23 November 2022 were
presented for consideration.
Page 13 –
Budget Process update – The statement ‘The proposals had included the use of cash
reserves in 2024/25.’ Should read 2023/24.
Page 12 - Capital Process and The Future of the
Strategic Investment Group – The Chair asked for an update if the Capital
Process had been presented to Council – The Head of Finance confirmed the
Capital Budget was being presented to County Council in February for approval.
A report on Revenue Budget was due to be presented to County Council 31
Page 9 – Corporate Risk Register – Independent Lay Member Nigel Rudd
asked for an update on any progression on the use of picture diagrams or tables
used within the register. The Chief Internal Auditor agreed to seek an update
from the Strategic Planning Team. Mr Rudd suggested the use of a SMART
reference in relation to the suggestion.
Page 8 – Minutes – Independent Lay Member Paul Whitham made a comment on
the WLGA online training along with the reference to training on additional
training on the Corporate Risk Register, suggesting it may be beneficial for
the committee to have a training plan to identify what training has been
requested, what had taken place and training due to take place. The Chair
agreed that it may be beneficial for members to monitor training and make
suggestions of future training areas. The Chief Internal Auditor suggested an
information report on future training sessions could be included on the agenda.
Page 14 - Progress Update on Statement of Accounts 2021/22 - The Chair asked if any update was available
on the Statement of Accounts. The Head of Finance confirmed there was an issue
on the asset register for the Statement of Accounts. The item that was causing
the difficulties was the way the authority had apportioned the spend on council
houses, where it had been apportioned it to the asset type as a whole rather
than individual assets. The original request had been to review the asset
register to 2007/2008. The intention had been to complete that work during
January 2023 to allow Audit Wales time to audit the additional work on the
asset register. Following that work it was hoped the report would be completed
for presentation to the committee in March 2023. Unfortunately, when commencing
that work he informed members that there were no working papers to back up
those records. It was explained that financial papers were not stored for that
length of time.
He confirmed discussions and conversations with Audit Wales to resolve
the issue had taken place. He informed the committee, it had been agreed to
restate the asset register from 2016/17 to the present day. That date had been
chosen as that year was the last date that all council houses were revalued. He
stressed the work had started, but it may prove difficult to meet the report
deadline for the March committee meeting. Finance officers thanked Audit Wales
for the continued support and positive communication.
A full update meeting will be presented at the March committee meeting.
The legislation for publication of the accounts had changed over recent
years, it still stated the early close down dates. Members heard if a
dispensation was issued explaining why those deadlines are not met the accounts
can be published at a later date. The authority had fulfilled the legal
David Williams the Audit Wales representative echoed the thoughts of the Head of Finance. ... view the full minutes text for item 4.
To receive a report on the position for Denbighshire County Council with regards to Recruitment and Retention issues and Workforce Planning activities (copy enclosed).
The Lead Member for Corporate Strategy, Policies and
Equalities introduced the report (previously circulated). She informed members
recruitment and retention had been included on the corporate risk register.
The report had
been produced in order to provide the committee with up to date information
regarding Recruitment and Retention issues within the council and the progress
on Workforce Planning activities.
The Interim Head of Legal, HR & Democratic
Services provided members with further information on the report. Alongside the
report, 3 appendices had been provided to help support the report and its
contents. Pre pandemic the authority had a number of areas which had been hard
to recruit in to, these had been some of the lower paid roles and a number of
professional roles. During the pandemic those areas had remained the main
vacancies that had been difficult to recruit. Statistics had been provided to
support the hard work on recruitment.
The main barrier the authority faced had been the
level of pay. The authority pay structure compared to agency pay structures was
often lower. Members heard that following the pay award agreed in April 2022 a
significant increase in pay for lower paid roles would be more in line with
similar roles outside the authority. It was hoped the increase in pay would aid
the recruitment of these roles.
Agile working was another concern noted by officers.
The pandemic saw a number of roles across the job spectrum become more
accommodating with working locations. This had impacted the recruitment and
retention of staff.
Members heard officers were currently in consultation
on a new way of working policy. It allowed employees more choice on where they
work, it was hoped it would have a positive impact on the retention of staff
along with the recruitment of staff from a wider area.
Following a review, officers highlighted one reason
employees moved to other employment had been due to staff development. It was
stressed training was provided to all staff and the development of staff to
Members were guided to the head count statistics, the
figure for 2019 looked lower than previous years, that had been due to the 660
Denbighshire Leisure staff not being included. The statistics provided a quick
reference for year on year staffing levels.
In summary, members heard officers were aware of
areas of concern. Work with services was on going to recruit in to vacant
roles. Social care in particular social workers was a key area of concern. This
area was of concern across Wales and the UK as a whole.
The Chair thanked the officers for the detailed
analysis of the report. He reminded members the reason for the report had been
due to a request made from members. He reminded members a report was presented
to the committee in October 2022 entitled Care Inspectorate Wales - Inspection of Intake and Intervention Service
2021. The report recognised the input of a high number of vacancies across the
service. The committee requested further information on the delivery of other
council services impacted by staff recruitment and retention issues. Any
concerns raised on the delivery of services may be a governance issue and
should be included in the Council Annual Governance Statement. He also reminded
members that Internal Audit will be reviewing the effectiveness of the measures
put in place later in the year.
debate the following points were discussed in more detail:
· Within the headcount table, it was noted the Social care staff were included under the Community Support Service and Education and Children’s Service. Members noted it may not be easy to read ... view the full minutes text for item 5.
To consider a report by the Chief Internal Auditor (copy attached) updating members on Internal Audit progress.
The Lead Member for Finance, Performance and Strategic Assets along with the Chief Internal Auditor (CIA) introduced the report (previously circulated). It was highlighted to members the dates on the report header should read January 2023. Members were updated on the Internal Audit Team’s progress in terms of its service delivery, assurance provision, reviews completed, performance and effectiveness in driving improvement.
He informed the committee that since the last meeting two members of the audit team had moved to different employment. Close working with HR to look at recruit as soon as possible had taken place. The CIA offered his thanks to the staff in HR for the support and guidance that had been given. It had been decided the best process would be to advertise for all 3 positions (Senior Auditor, Principal Auditor and career pathways auditor) at the same time. he informed members the adverts for those jobs had been made public over a number of different platforms including social media, internal websites and local papers. He was pleased to let the committee know a number of applicants had been received for all posts. Interviews for the posts had taken place earlier in the year and the Principal Auditor position had offered to a highly qualified individual. It was hoped he would be in post by February. Unfortunately, the applicants for the Senior Auditor post had not met the job specification. He informed members that two individuals had been appointed on to the career pathway role and would be in post as soon as possible.
The two individuals on the career pathway would create some work for the CIA to establish training courses and learning paths for the individuals. Looking forward it would create and develop staff in the audit team.
The report provided information on work carried out by Internal Audit since the last committee meeting. It allowed the committee to monitor Internal Audit’s performance and progress as well as providing summaries of Internal Audit reports. Also included was a summary of the changes to the structure of Internal Audit for members reference.
Confirmation that 9 Audits had been completed since the last committee meeting. Details of 8 of the audits were included in the report. The ninth audit had been completed for Denbighshire Leisure Limited, it was an annual report presented to their governance subcommittee.
Of the 8 completed audits all received a high or medium assurance. There had been three follow up reviews completed since the last update and summaries were included for information. All three follow up reports had moved from a medium assurance to high.
Members heard additional information on external audit reports had been provided, the information had been extracted from a report that had been presented to the Chief Executive Team, Senior Leadership Team and to Cabinet briefing. The Chief Executive had requested to be made aware of all audit reports.
Progress had been made on the internal audit plan. Members heard 2 whistleblowing reports and one officer request for some additional work had been received. Over the past two years, there was two special investigations completed, this year three special investigations had been requested. These investigations put pressure on officer time and impacted the progress on scheduled audit work. Members heard the CIA would aid completion of the special investigation financial work.
It had been noted a number of reports and audits that would be completed this year. A further update on the intended work would be provided at the March committee meeting.
The Chair thanked the CIA for the detailed report, he felt the additional information on the ... view the full minutes text for item 6.
At this juncture the meeting adjourned for a 5 minute comfort break (11.15 a.m.)
The meeting reconvened at 11.20 a.m.
To receive an update on the current Medium Term Financial Plan and Budget Timetable (copy attached).
The Lead Member for
Finance Performance and Strategic Assets, introduced the Budget Process Update
(previously circulated). The report provided members with details of the
process that had been followed to set the budget and provided details of the
timeline. The budget was a standing item at Cabinet and had been discussed. The
Lead Member praised the transparency of the Finance team, including Lead
Members and held a number of meetings with numerous teams and individuals. In
her opinion she stated she was confident that members had received an
opportunity to be part of the budget process.
The Head of Finance
explained the summary report had included an appendix which provided a detailed
update to all members following the draft settlement. The information had been
what had been in the Cabinet and Council report.
Members heard the
Autumn statement from the UK Government maintained the final two years of the
three-year agreement for funding that was announced last year. They also
announced additional funding for social care, education and the NHS.
The Welsh Government
announced its budget on the 13thDecember, with the draft settlement being
announced on the 14th December 2022. Members were guided through the
brief summary of the settlement (appendix 1). The better settlement produced an
additional £8.2m funding than what was expected. This enabled the authority to
fund the budget gap of £4.8m and not use any cash reserves for the 2023/24
financial year. Officers had been made aware of an increase in energy costs, a
pressure budget of £2.6m had included to cover the additional costs.
He stressed demand
driven statutory services would always be met.
stressed to the committee the 8.2% increase was still below inflation observed.
pressures identified above amount to £25.116m. A draft settlement of around
14.5% would have been required in order to fund all these pressures. The net
+8.2% settlement generated £14.231m additional revenue leaving a funding gap of
£10.885m. The Head of Finance guided members through the proposals to bridge
the gap details of which were included in the appendix. One of the positive
proposals highlighted was the impact of the triennial actuarial review of the
Clwyd Pension Fund. Which resulted in the Council finding itself in a position
of a small surplus instead of a
significant deficit that required repaying. This results in a
saving of £3.828m.
He informed members of the proposed timetable of Budget process as
17th January – Full
24th January – Cabinet
31st January – Council
28th February – Council – Full Council Tax Report / Approval
Early March – Final
The Early Settlement previously used to be October for the draft
settlement and December for the Final settlement. Welsh Government have agreed
the time difference between the draft and final settlement would be kept to a
Members heard it was hoped a report would be made available for
Cabinet in April 2023 on the revised medium term strategy followed by a Council
Briefing dependant on the determination of Cabinet in April.
The Chair opened the meeting for members comments and questions.
The Lead Member and officers expanded on the following areas:
Confirmation the Council Briefing held on 17th January
had been supportive of the paper and proposals. In principal Cabinet members
were in support of the Council Tax level and the proposals in the paper.
Cabinet had formally recommended the proposals to County Council.
· Details of the consultation with SLT, Cabinet Briefing, Group Leaders and Council Briefing meetings was included in the report. It was noted the ... view the full minutes text for item 7.
how the Council will manage its investments and its borrowing
for the coming year and sets the policies within which the Treasury Management
function operates (copy attached).
The Lead Member for
Finance Performance and Strategic Assets, introduced the Annual Treasury
Management Strategy Statement (TMSS) 2023/24 Report (Appendix 1 - previously
circulated) which showed how the Council would manage its investments and its borrowing
for the coming year and sets out the Policies within which the Treasury
Management function operate.
Management Update Report (appendix 2) provided details of the Council’s
Treasury Management activities during 2022/23.
The Head of Finance
thanked the Lead Member for the introduction. He concurred the paper was
presented to the committee for information.
Institute of Public Finance and Accountancy’s Code of Practice on Treasury
Management (the “CIPFA TM Code”) requires the Council to approve the TMSS and
Prudential Indicators annually.
The Governance and
Audit Committee was required to review this report before it is approved by
Council on 28 February 2023.
Members were reminded
of the three priorities considered when investing funds:
money safe (security);
sure that the money comes back when it is needed (liquidity);
sure a decent rate of return is achieved (yield).
Members were guided to the graph diagrams of the investment and borrowing balances which illustrated the changing levels over the previous three years. The Treasury Investment Strategy provided members with a great deal of information on the guidance and rules the authority followed with any investments.
Members were guided through the list of approved borrowing sources. Long term borrowing was sourced from PWLB any short term borrowing is sourced via a broker to secure the best interest rate.
Members heard the Minimum Revenue Provision was an annual statement produced.
It was noted no change had been made to the policy from the previous year.
Members were guided through the Liability benchmark, detailed within the
report. The Head of Finance stressed the importance of the monitoring of this with
Arlingclose. He highlighted a large increase was shown in the table. The reason
for that increase was due to the flooding defence work taking place in the North
of the Authority. He explained the cost for the work was having to be borrowed
but Welsh Government were providing 85% funding to cover the costs.
provided the in-year update for members. Members heard two loans had been
secured £10m in August 2022 and
£10m in September 2022 from the Public Works Loan Board (PWLB) in advance of
further interest rate rises. Members heard the authority was required to submit
annually a detailed 3 year capital expenditure plan to
the PWLB with confirmation of the purpose of the capital expenditure. Officers had
to confirm that we were not planning to purchase ‘investment assets primarily for yield’ in the current or next two financial years.
It was noted work
continued on the development a medium term strategy for capital. This would
help identify projects that we are planning to develop and invest in over a 5
to 10 year period, but had not yet gone through the approval process.
thanked the Lead Member and Head of Finance for the detailed summary of the report.
He stressed to members how essential this area of finance was in the financial management
of every Local Authority in the UK.
In response to the Chair’s question the Head of Finance agreed Treasury Management was an important element for the Governance and Audit committee to receive reports regularly and be kept abreast of the finances of the authority. He stressed the rules of which the team followed were published annually along with the authority’s performance measured against those rules. It was stressed to members that officers were in ... view the full minutes text for item 8.
To consider the committee’s forward work programme (copy enclosed).
The Governance and Audit Committee’s Forward Work Programme (FWP) was presented for consideration (previously
informed the committee a meeting between the Chair, Vice-Chair, Monitoring
Officer and Chief Internal Auditor had taken place. The meeting had been
arranged to discuss the committee’s work programme.
It was pleasing
to see the dates listed had been extended until the end of the year. It was
decided to review the reports that are presented to the committee to ensure adequate
time is given to agenda items. The committee had responsibility to receive a
number of reports such as Statement of Accounts, Treasury Management and
Internal Audit reports.
The Chair informed
the committee the Governance and Audit Annual report was in his opinion a key
report, which demonstrated how the committee accounted for those charged with
governance. The annual report was method to report back to County Council the
work of the committee.
for 2020/21 and 2021/2022 would be rolled into one report for the committee’s resolution.
It was a constitutional requirement for the committee to complete an annual
heard the Chair had raised the new Chartered
Institute of Public Finance and Accountancy (CIPFA) guidance which was available for all UK Local
Authorities with particular reference to Audit committees. It stressed the
importance of Governance and Audit committee’s completing an annual report.
The Chair suggested to the officers that the next annual report was
presented to Council as had been presented previously, but when completing the
report next year officers followed the CIPFA guidance.
encouraged members to contact him directly with any suggestions or amendments
to the work programme.
thanked the Chair and Vice-Chair for raising the work programme as an area of consideration.
that, the Governance
and Audit Committee’s forward work programme be noted.
To receive for information
a report by Audit Wales entitled Public Sector
Readiness for Net Zero Carbon by 2030 (copy enclosed).
The Chair informed the committee the Audit Wales report on Public Sector Readiness for Net Zero Carbon by 2030 (previously circulated) was for information.
In his opinion the report was very important. The report made reference to the impact on Corporate Governance of the Council. The Chair suggested the report be deferred to the next committee meeting and be presented as an item for debate.
Members were in agreement for the item to be included as an agenda report for discussion.
Lay Member Paul Whitham, made reference to paragraph 20 it was addressed to those charged with governance and scrutiny. He asked if the report was due to be shared with any Scrutiny committee. The Chair confirmed that all Councillors were charged with Governance, with the Governance and Audit Committee have the delegated role to review the Governance of the authority.
Audit Wales representative Gwilym Bury directed members to paragraph 10 of the report. The report did not include specific recommendations but more areas for consideration by public bodies. These considerations could be discussed by either Scrutiny or Governance and Audit committee.
The Climate Change Project Manager reaffirmed the
reason for the information report was to ascertain where best to present the
report and officers comments.
conclusion members agreed for an agenda report on the Audit Wales paper along
with the officer response be included on the agenda for the next Governance and
RESOLVED that the Governance and Audit committee note the information
report. Members also resolved to include the papers and officer response on the
next committee meeting.
The meeting concluded at 13:20 p.m.