Agenda, decisions and minutes

Apologies were received from Councillor Ted Fenton and from Councillor Jane Murphy who was to have substituted for Councillor Fenton.

There were no Declarations of Interest.

To approve the minutes of the meeting held on 17 November 2021 and to receive information arising from them.

The minutes of the meeting of the Audit & Governance Committee of 17 November 2021 were agreed and the Chair was authorised to sign them as a correct record.

Actions

The following actions as set out in the minutes were noted –

Item 72/21 Update on Closure of Accounts 2021/22: The Director of Finance to circulate to Members of the Committee the value of non-current assets.

Item 75/21 Counter Fraud Update: The Director of Finance -

(a)  Had circulated to Members of the Committee information comparing the number of fraud cases referred by Oxfordshire County Council to the Police for investigation with the number of cases submitted by other local authorities to the Police for investigation.

(b)  A training session for Members of the Committee in relation to fraud cases, including definitions, terminology and analysis of current fraud cases, had been included in the proposed Workshops Programme.

Currently council meetings are taking place in-person (not virtually) with social distancing operating in the venues. However, members of the public who wish to speak at this meeting can attend the meeting ‘virtually’ through an online connection. Places at the meeting are very limited due to the requirements of social distancing. While you can ask to attend the meeting in person, you are strongly encouraged to attend ‘virtually’ to minimise the risk of Covid-19 infection.

Please also note that in line with current government guidance all attendees are strongly encouraged to take a lateral flow test in advance of the meeting.

Normally requests to speak at this public meeting are required by 9.00 a.m. on the day preceding the published date of the meeting. However, during the current situation and to facilitate these new arrangements we are asking that requests to speak are submitted by no later than 9.00 a.m. four working days before the meeting i.e. 9.00 a.m. on 29 December 2021. Requests to speak should be sent to lucy.tyrrell@oxfordshire.gov.uk. You will be contacted by the officer regarding the arrangements for speaking.

If you ask to attend in person, the officer will also advise you regarding Covid-19 safety at the meeting. If you are speaking ‘virtually’, you may submit a written statement of your presentation to ensure that if the technology fails, then your views can still be taken into account. A written copy of your statement can be provided no later than 9.00 a.m. 2 working days before the meeting i.e. Friday 31 December 2021. Written submissions should be no longer than 1 A4 sheet.

No petitions had been received and there had been no requests by Members of the Public to address the Committee.

2.10 p.m.

Report by the Director of Finance

The Treasury Management Strategy & Annual Investment Strategy for 2022/23 outlines the Council’s strategic objectives in terms of its debt and investment management for the financial year 2022/23. 

Changes to the Treasury Management Strategy will be recommended to Council to be delegated to the Director of Finance in consultation with the Leader of the Council and Cabinet Member for Finance.

The Audit & Governance Committee is RECOMMENDED to endorse the Treasury Management Strategy for 2022/23 as outlined in the report.

The Committee considered a report setting out proposed changes to the Treasury Management Strategy which would be referred to Council for approval, along with a recommendation that the Director of Finance, in consultation with the Leader of the Council and the Cabinet Member for Finance, be granted the necessary delegated authority in accordance with the proposed changes.

It was recommended that the Audit & Governance Committee endorse the Treasury Management Strategy for 2022/23 as outlined in the report.

Tim Chapple, Treasury Manager, presented the report.

In the subsequent discussion, the following points were raised.

(a)       The Chair noted that, in Paragraph 8 of the report, it stated that the introduction of a “Liability Benchmark” was set out in Paragraph 50 of the report. This was, in fact, set out in Paragraphs 51 et seq. of the report [under the subheading “Liability Benchmark”].

(b)       Regarding the “Changes from 2021/22 Strategy” (Paragraph 7 of the report), it was proposed that, following a review of the balance sheets for the current year, the long-term lending limit for 2022/2023 be increased from £185 million to £205 million.

(c)        The Council had used LIBOR as a benchmark of performance. As LIBOR ceased to exist on 1 January 2022, officers now used the Sterling Overnight Index Average (SONIA) as the interest rate benchmark.

(d)       If, under a LOBO (Lender Option Borrower Option) agreement, the lender chose to increase the rates under the loan agreement, the Council would repay the loan and seek alternative funding.

(e)       The proposed changes in the 2022-2023 strategy were based on projections of average cash balances over the medium term with just under 50 percent retained for long-term investments.

(f)         Regarding the Oxfordshire County Council Liability Benchmark 2022/23 [Page 18 of the agenda pack], this reflected the Council’s Capital Financing Requirement compared with actual external debt and the minimum borrowing requirement.

(g)       Paragraph 16 “Forecast Treasury Portfolio Position”: The “Average In-House Cash” i.e., net position, referred to in the table in Paragraph 16 included earmarked reserves; capital & development contributions; general balances; internal borrowing; adjustments for working capital; and deferred income, from which the average in-house cash position could be calculated.

(h)       Paragraphs 22 & 100: Geopolitical Risks and Carbon Commitment: As a lender, the Council’s portfolio was primarily with other local authorities. In April of this year the Council would review its Environmental, Social and Governance (ESG) strategy in accordance with revised CIPFA Code of Practice. The ESG strategy would, in turn, be incorporated into the Council’s Treasury Management practices.

(i)          Paragraph 29 Prudential Borrowing: The phrase “borrowing for prudential borrowing” was tautologous and would be reworded.

(j)          Paragraph 33 et seq. OxLEP Ltd: The Council borrowed money on behalf of the LEP from the Enterprise Zone Business Rate which was collected by South Oxfordshire District Council on behalf of the Enterprise Zone thereby limiting the risk to the Council.

The Chair proposed, and it was agreed, that a briefing for Members be provided with information about OxLEP Ltd and the Council’s role  ...  view the full minutes text for item 5/22

2.25 p.m.

Report by the Director of Finance.

This is the second annual report to those charged with governance on the Council’s compliance with the FM Code and follows an initial assessment for 2020/21 that was considered by Audit & Governance Committee in January 2021. 

The report sets out the outcome of the compliance self-assessment undertaken for 2021/22 which has found that the Council is well placed to meet the requirements of the FM Code. 

The Audit & Governance Committee is RECOMMENDED to endorse the assessment of compliance against the Financial Management Code for 2021/22 (Annex 1)

The Committee considered a report of the Director of Finance recommending that the Committee endorse the Assessment of Compliance against the Financial Management Code for 2021/22.

The report was presented by Lorna Baxter, Director of Finance.

In the subsequent discussion, the following points were raised in relation to Annex 1 “Financial Management Code of Practice – Summary Compliance Assessment 2021/22”

(a)  Reference: 1. CIPFA Financial Management Standards

1A: There was no formal requirement to report to Cabinet and/or Council regarding Value for Money (VfM).

       Services used benchmarking to inform opportunities to improve VfM and it was proposed that processes be put in place to improve the benchmarking system.

(b)  Reference: 5. Stakeholder Engagement and Business Plans

5L:  This was a new priority for the Council, and it was proposed that feedback from Engagement & Consultation would be used to inform the development of the Council’s Strategic Plan.

(c)  Each of the following references stated it was proposed further to develop the Business Management & Monitoring Report.

·       Ref. 2. Governance and Financial Management Style: Row E

·       Ref. 3. Long to Medium-Term Financial Management: Row I

·       Ref. 6. Monitoring Financial Performance: Row O

The Director of Finance noted that the detail of how this was to be achieved was set out in the report and that Annex 1 extrapolated the key issues. It was proposed to improve the alignment of this information with budget information once the Strategic Plan had been agreed by Council.

(d)  Reference: 6. Monitoring Financial Performance

6N: It was proposed that the Quarterly Capital Programme report by Finance officers, which focused predominantly on financial elements, should also include information on delivery of projects, programmes, and outcomes.

(e)  Reference: 2. Governance and Financial Management Style

2D: The Director of Law & Governance stated that the updated Local Code of Governance had been finalised and would be submitted to the Committee.

RESOLVED: To endorse the Assessment of Compliance against the Financial Management Code for 2021/22.

2.40 p.m.

Report by Director of Finance.

This report presents the Internal Audit progress report for 2021/22.

The committee is RECOMMENDED to

a)    Note the progress with the 2021/22 Internal Audit Plan and the outcome of the completed audits.

b)   Note the Blue Badge Enforcement Strategy.

The Committee considered a report by the Director of Finance updating the Committee on the Internal Audit Service, including resources, and completed and planned audits.

It was recommended that the Committee –

(a)  Note the progress with the 2021/22 Internal Audit Plan and the outcome of the completed audits; and

(b)  Note the Blue Badge Enforcement Strategy.

Sarah Cox, Chief Internal Auditor, presented the report.

In the subsequent discussion, the following points were raised.

(a)  Regarding Appendix 1, 2021/22 Internal Audit Plan – Progress Report: Environment & Place (Page 49), a new system to ensure the accuracy of payments had been implemented and it was for this reason that the Highways Contract Management Audit would start in Q4.

(b)  The Red Flag next to GDPR: Information Audit (Pages 57 & 58) reflected weaknesses in the Asset Register Information which had now been addressed with officers looking at ways in which this might be improved.

The Chair proposed that this topic be referred to the Audit Working Group (AWG).

ACTION: Chief Internal Auditor to include GDP 2021/22 on AWG Forward Workplan.

(c)   Keith Stenning, Community Operations, Oxfordshire County Council, provided information on the agency agreement between Oxfordshire County Council and West Oxfordshire District Council for the implementation, operation, and enforcement of the Blue Badge scheme.

(d)  Payment Card Industry Data Security Standard (PCI DSS) 2021/22 (Pages 61 – 63):

Sarah Cox, Chief Internal Auditor, noted the complexities of PCI issues but stated she was satisfied that the Green RAG rating was appropriate.

(e)  In response to questions about the misuse of Blue Badges on private land and the time spent on enforcement of the Blue Badge scheme compared with other local authorities, Mr Stenning noted that the Council had no enforcement powers on private land and enforcement in City Council car parks was determined by the arrangements between the County Council and the respective District Councils.

Regarding the time allocated to enforcement of the scheme, Tessa Clayton, Audit Manager, Oxfordshire County Council, stated that it varied considerably how much time individual local authorities spent on Blue Badge enforcement. Ms Clayton stated that officers were satisfied that the amount of time Oxfordshire County Council spent on enforcement was proportionate and would be reassessed, if necessary. She noted that time spent by Oxfordshire County Council on enforcement was about average when compared with other local authorities.

(f)    Environment & Place Capital Programme – Major Infrastructure (Page 51): Ms Baxter, Director of Finance, stated the 2021/22 internal audit had been deferred while a fundamental review took place and that this would be reviewed as part of the 2022/23 audit planning process.

(g)  Mr Stenning apprised the Members of the enforcement process in relation to blue badges and the Key Performance Indicators (KPIs) used to measure enforcement performance.

ACTION: Community Operations (KS) to provide Members with copies of the Blue Badge scheme KPIs.

(h)  Officers reported on the misuse of Blue Badges either with or without the knowledge of the Blue Badge holder and the implications, thereof.

(i)  ...  view the full minutes text for item 7/22

3.00 p.m.

Report by Director of Law & Governance.

The purpose of this report is to update the Committee on the progress of the Procurement Hub since the recent transformation activities.  It seeks to confirm to the Committee that any outstanding actions which have been identified as requiring change or improvement since then, have happened, and provides more information on the structural changes which have happened in the procurement function since this point.

The Committee is RECOMMENDED to:

(a)          note the update and improvements made to the Procurement Hub in the last year since the restructure, and

(b)          endorse and confirm completion of the Action Plan as detailed in Annex 1.

The Committee considered a report of the Director for Law & Governance updating the Committee on the progress of the Procurement Hub since the recent transformation activities.

It was recommended that the Committee –

(a)  Note the update and improvements made to the Procurement Hub in the last year since the restructure; and

(b)  Endorse and confirm completion of the Action Plan as detailed in Annex 1. Team

Anita Bradley, Director for Law & Governance, and Melissa Sage, Head of Procurement Contract Management, presented the report.

In the subsequent discussion, the following points were raised.

(a)  The Chair referred to the following matters –

·       That she would like to see a copy of the Procurement Handbook (“the Handbook”), referred to in Paragraphs 7 & 8 of the report;

·       That the Handbook be referred to the Audit Working Group to review the recommendations of PWC when asked to design the Handbook and what had been omitted from the present version of the Handbook;

·       Publication of the Government’s procurement proposals [in response to Brexit].

Ms Sage stated that a government Green Paper[1] had been published last year on public procurement and that the consultation on the proposals set out in the Green Paper had now concluded, but that there would be no further developments before April 2023.

(b)  The Handbook was a live document that would evolve and be updated as necessary.

(c)   Governance, Delegations & Decision-Making, Including Key Decisions (Governance Review): involving sums of £1 million or more (Page 82) would be taken in consultation with Members.

Decisions regarding the delegation of authority to officers were included in the Constitutional Review which would be submitted to Council. The Chair asked that Members refer any comments they might have on this subject to the Constitutional Review Working Party.

(d)  Regarding challenges to the procurement process (Page 74, Paragraph 10), Ms Sage confirmed that, other than some letters of enquiry about processes and procedures, there had been no challenges.

(e)  Annex 1 Management Action Plan (Page 83), Row 5 “Briefing of Portfolio Holders (interface with Members): regarding the reference to “Portfolio Holder/Director briefing protocol to be agreed”, under the heading “Activity”, Ms Bradley stated that this was not a written protocol but rather a reflection of the provisions and expectations set out in the Council’s Constitution.

(f)    Ms Sage noted that the Procurement Handbook was an operational manual for Procurement officers and did not detail schemes of delegation which were set out elsewhere.

(g)  A report on the Social Value Policy (Paragraph 13) would be submitted to Cabinet in February and a report on the Council’s Procurement policy would be submitted to Council in the next few months. Accordingly, the Procurement Handbook and the Social Value Policy would be incorporated into that report.

Once a First Draft of the Procurement Policy report had been prepared, Members would be invited to comment on the draft report. Regarding the Social Value Policy, the relevant Portfolio Holder had been consulted on the content of this policy.

(h)  Regarding the  ...  view the full minutes text for item 8/22

3.20 p.m.

Report by Director of Law & Governance and Monitoring Officer

The purpose of the Working Group is to make recommendations to this Committee on potential changes to the Constitution. The Committee endorsed an outline approach which envisaged the Committee receiving a draft, revised version of the Constitution in March 2022.  The Committee did however affirm that achieving a Constitution that is fit for purpose and understandable by the public, members and officers was the key consideration.

The Constitution Working Group has met twice and it has become apparent that the timescale in which to produce an updated Constitution that is fit for purpose and understandable is not achievable within the initial anticipated timescale. 

The Constitution Working Group, therefore, ask the Committee to extend the deadline for the review until July 2022

The Committee is RECOMMENDED:

(a)          To note the progress made to date with the Constitution Review; and

(b)          To note the concerns of the Constitution Review Working Group around delivery of a new Constitution by the end of March 2022 and to extend that deadline until 31 July 2022.

The Committee considered a report by the Director of Law and Governance and Monitoring Officer updating the Committee on the Review of the Council’s Constitution, and the work of the Constitution Review Working Group.

It was recommended that the Committee note the –

(a)  Progress made to date with the Constitution Review;

(b)  Concerns of the Constitution Review Working Group around delivery of a new Constitution by the end of March 2022; and

(c)   The proposal to extend the deadline [for delivery of a new Constitution] until 31 July 2022.

Anita Bradley, Director of Law and Governance, presented the report.

In the subsequent discussion, the following points were raised.

(a)  There were statutory provisions relating to local authority constitutions. However, it was proposed that the constitution should reflect the local authority and, therefore, officers were consulting with Members of the Constitution Review Working Group on the appropriate style and content for Oxfordshire County Council’s Constitution. In so doing, Members were being shown several examples of local authority constitutions.

(b)  To resolve any anomalies and inconsistencies that might emerge because of the drafting process, Ms Bradley proposed that she be give delegated authority to resolve any anomalies and inconsistencies.

RESOLVED: To –

(a)  Approve the report’s recommendations; and

(b)  The proposal that the Director of Law & Governance be granted the necessary delegated authority to reconcile any anomalies and contradictions that might arise because of redrafting the Council’s constitution.

3.30 p.m.

Director of Law & Governance and Monitoring Officer

In recent years, the work of the Committee has benefited from the co-option to it of an Independent Member, Dr Geoff Jones.  While it is not a statutory requirement to do this, it is recommended best practice to do so.  The perspective and challenge afforded by an Independent Co-opted Member is integral to the purpose of an effective audit committee, as has been proven through the services of Dr Jones.

It is also recommended best practice that this independent perspective is refreshed periodically.  As such, this report sets out a proposal for seeking public interest in the role of an Independent Co-opted Member for this Committee. This proposal involves a public advertisement against the CIPFA skills and competencies framework for audit committee members.  The appointment, and any remuneration for it via a Special Responsibility Allowance, will be for Full Council to determine.

The Committee is RECOMMENDED to approve the proposed approach for recruiting and appointing two Independent Co-opted Members to this Committee.

The Committee considered a report by the Director of Law and Governance and Monitoring Officer recommending that the Committee approve the proposed approach for recruiting and appointing two Independent Co-opted Members to the Committee, as set out in the report.

Anita Bradley, Director of Law and Governance, presented the report, noting that the report referred to the Redmond Review published in 2020 on the arrangements in place to support the transparency and quality of Local Authority Financial reporting.

In the subsequent discussion, the following points were raised.

(a)   Local authorities who had not appointed Independent Members were now addressing this issue in response to the Redmond review and CIPFA guidelines.

(b)   Given the complexity of the recruitment exercise, it was proposed that the Council should advertise for the appointment of two Independent Members.

(c)    Officers were of the view that it was appropriate to appoint two Independent Members as to appoint more may result in a dilution of the duties and responsibilities of Committee Members.

(d)   Staggering appointments would afford the opportunity to retain the knowledge and experience of the current Independent Member, Dr Jones, should he wish to stand for reappointment, while providing continuity when appointments ended.

(e)   It would be advantageous to appoint an Independent Member who had no connections with the County Council or the District Councils.

(f)     It was recommended Best Practice that, to retain the independent perspective and willingness to challenge norms that an Independent Co-opted Member brought to their role, Independent Members should not be allowed to remain in post for so long that they lost their “independence”.

(g)   It would make sense to retain the experience of the current Independent Member, while recruiting a new Independent Member for the reasons set out in the Best Practice guidelines.

(h)   In response to a proposal by the Chair, Ms Bradley confirmed that, as the Monitoring Officer, both she and Ms Baxter, as the Section 151 Officer, had no objection to any appointment as an Independent Member being for a period of four years to allow the Independent Member(s) sufficient time to develop knowledge and experience of the role such that they could make a meaningful contribution to the work of the Committee.

(i)      Once an initial recruitment exercise had been carried out, officers could report back to the Committee on the response to the recruitment exercise and on more detailed matters such as the recommended terms of any appointment.

(j)      It may be preferable to appoint any Independent Member(s) for a period of two years, subject to possible extension of the term of office, to determine if they were competent in their role as an Independent Member(s).

(k)    Subject to confirmation, it was understood that Dr Jones’s term of office as the Committee’s Co-opted Independent Member expired in May of this year.

(l)      It was for the Committee to determine the number of years of any appointment and whether it would wish to reappoint Dr Jones should Dr Jones wish to reapply.

(m)  It was  ...  view the full minutes text for item 10/22

3.45 p.m.

Report by the Director of Finance.

This report presents the matters considered by the Audit Working Group meeting of 15 December 2021.

The Committee is RECOMMENDED to note the report.

The Committee considered a report by the Director of Finance summarising the proceedings of the Audit Working Group (AWG) meeting on 15 December 2021. It was recommended that the Committee note the report. The report was presented by Dr Geoff Jones, Chair of the AWG.

In the ensuing discussion, it was noted that it had been proposed that the HF1 Didcot Infrastructure and A40 HIF2 Smart Corridor projects, which had been discussed at the last meeting of the AWG, be given further consideration by the AWG at a meeting to be convened before the end of January.

ACTION: The Chair, DLG & Finance Officers to canvass for a suitable date for a meeting of the AWG in January 2022.

RESOLVED: To note the report.

3.50 p.m.

To review the Committee’s work programme and training schedule for 2021/22.

The Committee considered the Audit & Governance Committee Work Programme 2021/2022. The programme was presented by Sara Cox, Chief Internal Auditor. It was noted that, attached to the report was a Draft Audit & Governance Committee 2022 Training & Briefing Programme.

Regarding the Training & Briefing Programme, which had been aligned with the Committee meeting dates, Ms Cox raised the issue of when Members might wish to undertake their self-assessment exercise in accordance with the CIPFA guidelines for Audit Committee Members. Once this was known, a suitable date would be added to the Audit & Governance Committee calendar.

It was noted that the Local Code of Corporate Governance report (see Item 6/22(e) above) would be submitted to the next meeting of the Committee on 16 March 2022.

NOTED