Up to 15 minutes are allowed for public participation. Participants are restricted to 3 minutes each.

There was no public participation.

To confirm and sign as a correct record Minutes of the Meeting of the Governance and Audit Committee held on Tuesday 11 October 2022, and reconvened on Friday 21 October 2022.

RESOLVED that the Minutes of the previous Meeting of the Governance and Audit Committee, held and adjourned on 11 October 2022, and re-convened on 21 October 2022 be approved and signed as a correct record.

Members may make any declarations of interest at this point but may also make them at any point during the meeting.

There were no declarations of interests made at this point in the meeting.

Matters Arising schedule setting out current position of previously agreed actions as at 21 November 2022.

Members expressed their thanks for the flood risk letter, and requested further information going forward. The Matters Arising Schedule was duly NOTED.

Members considered an External Audit report on the quality of the Statement of Accounts. The report was introduced by Mike Norman of Mazars, one of the Authority’s External Auditors. In presenting the report he highlighted the key headlines, these being on pages 23 and 24 of the report 

·       An anticipated unqualified audit opinion on the 2021/22 Statement of Accounts, with the proposed audit opinion included in the Draft Auditor’s Report attached at Appendix B of the main report.

·       Value for Money work remained in progress and the results would be reported within the Auditor’s Annual Report later in the year. There were no significant weaknesses in arrangements to report in relation to the arrangements that the Council had in place to secure economy, efficiency and effectiveness in its use of resources. Further detail on the Value for Money work was provided in section 7 of this report.

·       The Whole of Government Accounts had not yet been issued to authorities to complete and the Auditors were awaiting instruction from the National Audit Office.

·       There have been no public objections to the accounts.

Referring Members to page 26 of the report pack, the External Auditor confirmed that work in relation to the “Net Defined Benefit Pension Liability valuation” was now completed and as such he could confirm that no material issues had been identified. 

Members attention was also drawn to Section 6 of the report which set out audit misstatements, which included a small number of unadjusted misstatements.

There was one material misstatement identified during the Audit that had now been corrected by Officers, page 45 of the report pack provided details of this and circumstances which had seen this arise and there were two unadjusted misstatements to note in the following areas in

·       Pension Scheme – Net Pension Liability. The Pension Fund advised that there had been an increase in the pension fund asset value in the time between the Actuary preparing the original IAS19 pension figures and the audit of the Council’s accounts (September/October 2022). A new IAS19 report was therefore requested by the Council in October 2022 and the amount of the valuation increased to the asset value was £439k. The impact of this was to reduce the Council’s net pension liability by the same sum.

·       Valuation of Property, Plant and Equipment. During the audit a small number of errors were identified in asset data used by the Valuer. Updated valuations for the affected assets were requested which had resulted in a net increase in the asset values of £88k.

These were not considered to be material and Officers had not proposed to adjust the financial statements as result, the Auditor indicated his satisfaction with that position.

In concluding the External Auditor highlighted that the Audit had not identified any significant internal control deficiencies, no significant risks nor had they encountered any difficulties in undertaking their work. Thanks were expressed to the finance team for their co-operation.

Debate ensued and in response to questions, regarding the material misstatement, the  ...  view the full minutes text for item 34.

Members considered the Audited Statement of Accounts for 2021/2022. An introduction was provided by the Section 151 Officer, who was pleased to advise that the Statement of Accounts 2021/22, had received an unqualified audit opinion. The Statements reflected the Authority’s financial activity for the year up to 31 March 2022.

Prior to opening the debate, and at the request of the Chairman, the Monitoring Officer confirmed all present had undertaken the required training in accordance with the Constitution.

In opening, Members congratulated Officers on the presentation of the report and commented on the positive impact the Council’s Community Grant Scheme had on local communities and in levering in match funding.

Lengthy questioning ensued and explanation was requested and received regarding the details of note 11 on page 131 of the agenda pack, regarding the corrections listed. The Section 151 Officer explained the movement in earmarked reserves had been recategorized for consistency into three types of reserves as required by the newly instated statement of recommended practice. Members were assured that it was a requirement to classify, and provide competitors contingency and risk service investments.

In responding to further questions in respect of the Council owned companies and joint ventures, the S151 Officer advised as to why these companies were only referenced in a disclosure note to the Accounts.  This was primarily due to them not being material in size.  Officers outlined how materiality was defined and Members were reminded where Business Plans and accounts for such ventures were reported to.

Members were keen to ensure there was a route by which subsidiary companies were reviewed to ensure they still met their objectives, were fit for purpose, served a need and were still the appropriate mechanism. Furthermore, there should be transparency around any such review. Members were assured that the Monitoring Officer could consider reviews and future audits into West Lindsey District Council's subsidiary companies and it was suggested these should be considered for inclusion in the Annual Audit Plan. 

Members also learned the decreased received money was due to the decline in Covid-related activity provided by the Authority.

In responding to a question which sought clarity of what the service investment fund was used for and how it was replenished, Members ascertained such funds were used for IT upgrades, IT replacement programmes, and new systems such as the new finance system introduced in year. Service Investment Funds were generally funded by a combination of under spends in a year, where something had been budgeted to take place in one year, but the actual renewal took place in the following year, creating a special ear marked reserve for it, or any surplus in grant funding that wasn't expected. Earmarked reserves were created either from an underspend or where there was a known future liability.

Members further sought clarity as to whether service investment, involved investment in training.  In responding the Section 151 Officer advised that earmarked reserves could be used, for invest to save projects, these may be capital investments or  ...  view the full minutes text for item 35.

Members considered a report which provided a review of whistleblowing activity by the Monitoring Officer for the 2021/22 year.

The policy was reviewed by the Governance and Audit Committee in 2021 with recommendations made for the Joint Staff Consultative Committee to consider. The reviewed policy was presented to the Corporate Policy and Resources Committee in April 2022 and was agreed for adoption.

There had been 5 referrals made to the Whistleblowing helpline in the period April 2021 to March 2022. 1 referral was made in April 2022 which fell outside of this reports period but was been included for information.

4 referrals were passed to the DWP

1 referral was made regarding planning permission and was passed to the service as a planning query

1 was made by a fraud investigator from Crawley Borough council to locate a person suspected of committing social housing fraud (this was the April 2022 case)

There had been no incidents of whistleblowing raised internally within the Council. It was still vitally important that the Authority maintained and continued to publicise the reporting mechanisms and Officers outlined the various mediums by which such promotion was undertaken. The Counter Fraud Team were the gatekeeper for all whistleblowing referrals for the District Council. The policy continued to be communicated to staff and was included in the quarterly corporate.

Debate ensued, and Members questioned the value of the service. The Monitoring Officer explained the services and reporting comes through all related activity, with its cost forming part of the package of internal audit work, such as counter fraud investigations, and that the results in the report were from the whistleblowing helpline. Regarding the value for money, it was considered essential for staff, residents, and contractors to be able to raise whistleblowing concerns externally to the organisation and this was provided by the Partnership.

In responding to further queries, Members heard the service formed part of the Corporate Induction, with the Policy advertised further to the Wider Management Team. It also formed part of the consideration of the 2023/24 Council's work. The Monitoring Officer referenced further outreach, such as the Parish Newsletter and broader publication schemes was possible.

In the concluding part of the debate, the Monitoring Officer clarified that whistleblowing could be considered in the next year's audit plan. 

            RESOLVED that: -

(a)         the contents of the report be noted; and

(b)        the Committee continue to receive annual reports in relation to policy implementation and incidents.

The Workplan as set out in the report was NOTED.