Venue: Hybrid meeting - Zoom - County Hall. View directions
Contact: Connor Farmer
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Apologies To receive apologies for absence. Minutes: Apologies for absence were received from County Councillors Graham Breeze, Liz Rijnenberg and Jackie Charlton (Cabinet Member for a Greener Powys), Catherine James (Head of Transformation and Democratic Services), Craig Flynn (Deputy-Head of Finance), Gareth Lewis (Audit Wales) and Bets Ingram (Strategic Equalities and Risk Officer).
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Disclosures of Interest To receive any disclosures of interest by Members relating to items to be considered at the meeting. Minutes: There were no disclosures of interest received. |
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Minutes and Action Log PDF 197 KB (i) To authorise the Chair to sign the minutes of the previous meeting held as follows as a correct record: · 29-09-2023
(ii) To receive and consider the Action Log. Additional documents: Minutes: Documents Considered: · Draft minutes of the Governance and Audit Committee meeting held on 29th September 2023.
Background:
RESOLVED to authorise the Chair to sign the minutes of the Governance and Audit Committee meeting held 29th September 2023 as an accurate record.
Documents Considered: · Governance and Audit Committee - Action Log
Background: · The Governance and Audit Committee Action Tracker was reviewed by Committee Members. Updates received from officers and other attendees would be added to the Committee’s action tracker, to be reviewed by Members periodically at future meetings.
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Quarter 2 Work Programme Update PDF 282 KB To receive the Quarter 2 Work Programme Update from Audit Wales for information. Additional documents: Minutes: Documents Considered: · Audit Wales Work Programme and Timetable, as of 30 September 2023 (Quarter 2).
Background: · The Quarter 2 Work Programme was provided by Audit Wales and listed the ongoing and published audit work in respect of Powys County Council. The Audit Lead (Performance) provided Members with an update on performance work and noted that it was mostly complete. Attention was drawn to the Springing Forward Asset Management audit report which was considered later in the meeting.
· A thematic piece of work around performance information had been issued as a draft report, which would be published once the clearance process was completed. The Digital Review report had been issued and was scheduled onto the Committee’s Forward Work Programme for January 2024. Scoping work was underway for audits planned for 2024 including future thematic work. The Performance Audit Lead noted that work was progressing well in terms of performance audit.
· The Audit Manager (Finance) noted that deadlines had been met to publish the Statement of Accounts and Pension Fund Accounts. The Audit of the Council’s 2022-23 Grants and Returns was ongoing and on-track to be completed according to the agreed timescales.
· The Quarter 2 Work Programme also listed the status of other local government and national work such as Estyn and Care Inspectorate Wales (CIW).
Issues Raised by the Committee and Responses Received:
Actions: · Audit Wales to provide scoping details of ‘The senior public service’ audit report. · Audit Wales to confirm engagement details in respect of the Good Practice Event planned for Spring 2024.
Observations and Recommendations: · The Chair thanked Audit Wales for providing the work programme update and would await further details in respect of the two actions.
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Statement of Accounts 2022-23 PDF 123 KB To receive and consider the Statement of Accounts, ISA 260 and Letter of Representation. Additional documents:
Minutes: Documents Considered: · Statement of Accounts 2022/23 · Audit of Accounts Report (ISA 260) · Letter of Representation
Background: · The Financial Reporting and Policy Accountant provided a presentation for Committee Members, to highlight the adjustments made to the Statement of Accounts and Letter of Representation following comments received from Committee Members at the private accounts seminar. · The draft Statement of Accounts was signed by the Section 151 Officer on 30th June 2023, which were then forwarded to Audit Wales. The deadline for providing the draft accounts was 31st May, with the publication deadline being 31st July 2023. Welsh Government allowed revised deadlines provided that the reasoning for the delay was published, which the Council did by providing the reasoning on the website. · The draft Statement of Accounts were reviewed by the Governance and Audit Committee at a previous seminar meeting held in July. · The accounts had been available for public inspection between 27th September and 25th October. · Governance and Audit Committee had reviewed the audited accounts at a private seminar, in advance of the public meeting when both the Statement of Accounts and Pension Fund Accounts would be presented for approval. · The Head of Finance (Section 151 Officer) noted that the Council was entering a challenging environment for public sector finance, strengthening resilience was therefore paramount.
Key messages and adjustments made to the Statement of Accounts · Net assets and reserves had increased by £309 million from the previous year, the main driver being the reduction in the liability to the defined pension benefit due to the discount rate of two percent (further details were contained within Note 38). · Movement within Property, Plant and Equipment (itemised within Note 12). · Debtors and Creditors balances had decreased (Notes 16 and 18) due to the large volume of individual grant funding in areas such as Covid and the cost of living in financial year 2021/22, which showed as balances in the previous year. · Short-term investments decreased by £15.6 million, as a result of the Council repaying the repayable loan to Welsh Government regarding the Global Centre for Rail Excellence (GCRE) (Note 15). · Long-term borrowing decreased due to early redemption of some LOBO loans which totalled £17 million (Note 15). · £309 million - Reserve Movements increases: o £302 million of the £309 million movement were attributed to unusable reserves. (Note 21) § £261 million related to the Pension Fund reserve, mainly due to the discount rate increasing the revaluation reserve by £23 million. The Capital Adjustment Account increased £20 million. o £7 million attributed to usable reserves (Movement in Reserves Statement): § £4 million Specific Reserve increase (£3 million funding for Pay Award) (Note 8). § £3 million Capital Receipts reserve (Note 20). o The makeup of the £4 million specific reserve increase across service areas reported by the Council was seen in the Expenditure and Funding analysis. § It was noted that an adjustment had been made since the initial publication of the audited draft Statement of Accounts relating to the final ... view the full minutes text for item 5. |
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Pension Fund Accounts 2022-23 PDF 96 KB To receive and consider the Pension Fund Accounts, ISA 260 and Letter of Representation. Additional documents:
Minutes: Documents Considered: · Pension Fund Accounts 2022/23 · Audit of Accounts Report (ISA260) · Letter of Representation
Background: · The reporting timeline of the Pension Fund Accounts was set out in the Pension Fund Accounts which would be considered and approved by the Pension and Investment Committee at a later date, with a publication deadline of 1st December 2023. · Net assets had decreased by £38 million from the previous year, the main driver for this was the change in market value of the investments. · Movements between assets during the year as the asset allocation changed. This impacted the analysis of investments and contributed to movements in fee levels for the categories as these were based on percentages of assets under management in the main. · Contributions receivable for the main employer (Powys County Council) were collected through the Council’s payroll. Outside bodies sent returns and income on a monthly basis. · Payments were calculated by the Pension’s administration department within the Council. · Pensions and Investment Committee received valuations of the Fund as part of their quarterly meetings. o The Committee received the draft Pension Fund report on 6th October 2023.
Audit of Accounts Report · The materiality level was set at £7.803 million. · Although Audit Wales intended to issue an unqualified opinion, there was an uncorrected misstatement relating to private equity valuations (£1.463 million) after receiving additional reports after 30th June 2023. · It was decided not to adjust the misstatement due to the valuation received at 30th June 2023 being below the materiality level. If the misstatement was adjusted there would be adjustments flowing through the accounts which would delay the audit and publication process. It was noted that if the misstatement was greater than materiality, then the adjustment would have been made. o Narrative was included within Note 3: Critical Judgments in Applying Accounting Policies which stated the subjective nature of the fair value of private equity investments. · Appendix 3 Adjustments: o AVC valuations not available on 30th June 2023 had been included in the amended version. o Narrative, presentational and minor amendments. · Minor amendments and adjustments were made, regarding AVC valuations which had now been included in the amended version of the Pension Fund Accounts. · The Audit Manager (Finance) reported that the uncorrected statement was highlighted as it was above a trivial level (reportable) although it was well below the materiality level. Audit Wales was therefore of the opinion that it should be brought to the attention of the Committee, however it did not give an untrue view of the accounts and would not affect a person’s opinion when reading the accounts. · The Audit Manager (Finance) reported that of the two corrected statements, one was as a result of information being received after the draft accounts had been prepared with the other corrected statements being minor amendments. · It was reiterated that similarly to the Council’s Statement of Accounts, the Pension Fund Accounts were a good set of accounts.
Issues Raised by the Committee and Responses Received:
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Annual Governance Statement Assurance PDF 129 KB To receive and consider the report of the Leader and Portfolio Holder for an Open and Transparent Powys and the Annual Governance Statement. Additional documents: Minutes: Documents Considered:
Background:
Proposed by Lay Member J Brautigam and seconded by County Councillor A Williams, the Governance and Audit Committee:
RESOLVED to approve the Annual Governance Statement 2022/23.
Observations and Recommendations:
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Treasury Management - Quarters 1 and 2 PDF 71 KB To receive and consider the reports of the Cabinet Member for Finance and Corporate Transformation. Additional documents:
Minutes: Documents Considered: · Quarters 1 and 2 Treasury Management Reports (2023/24).
Background: The Capital and Financial Planning Accountant provided an overview of the reports of the Cabinet Member for Finance and Corporate Transformation.
Investments: · Interest received rose from £160,000 in Quarter 1 to over £500,000 in Quarter 2 and was held as surplus for cashflow purposes in deposit accounts. It was reported that there had been some short-term lending to other local authorities.
Capital Programme: · The capital programme had increased from £93 million in Quarter 1 to £96 million in Quarter 2. The increase was mostly due to extra grants being awarded in year. · Despite the increase, there had been a drop in borrowing which had fallen from 48% to 42%, the borrowing level was expected to drop further towards the end of the year when schemes were reprofiled. · Capital Financing Requirement (CFR) projections had fallen in-line with the reduced borrowing requirements.
Borrowing/Re-scheduling: · Public Works Loan Board (PWLB) rates (borrowing rates based on the Gilts markets) remained higher than they were at the beginning of the year, although some terms were now lower than the peak.
Debt Maturity: · £5 million in borrowing from other local authorities was repaid in Quarter 1, a further £8.5 million was repaid during Quarter 2. £17.4 million was repaid to Welsh Government in respect of GCRE. · A further £25 million borrowing was due to be repaid in Quarter 3, to cover this, £20 million borrowing was arranged from other local authorities. £5 million was received in September, and £15 million was planned to be received in October.
Financing Costs to Net Revenue Stream: · Estimates showed an improved position this year, however there was still a peak predicted next year as borrowing rates remained high, therefore short-term borrowing was preferred to avoid locking-in to higher rates.
Economic Background and Forecasts: · The Council’s treasury adviser Link Group had provided their forecasts which was included in the reports.
Sundry Debt: · Increased in Quarter 1 up to £17 million, which then dropped to just under £15 million in Quarter 2. Further breakdown and summary were available within the report.
Council Tax and National Non-Domestic Rates (NNDR): · Council tax collection was very slightly down (0.22%) at the same point in the previous year, NNDR was 3.84% up from the same point last year. · Economic forecasts from Link Group were available in the appendices, VAT KPIs had also been attached. · For Quarter 1, £14,000 VAT had been recharged to services due to not being claimed correctly. This had increased to just under £70,000 in Quarter 2 although there was potential to recover £63,000, provided that the correct documents were obtained. · The report also contained a breakdown in charges per service and type.
Issues Raised by the Committee and Responses Received:
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SWAP Internal Audit Adverse Reports PDF 114 KB To receive and consider the following SWAP reports: 1. School Theme – Governance 2. School Theme – Finance 3. Brecon High School Internal Audit Report Additional documents:
Minutes: Documents Considered:
Background:
SWAP Thematic Report – Governance:
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Springing Forward Asset Management Review PDF 822 KB To receive and consider a report from Audit Wales and the organisational response. Additional documents:
Minutes: Documents Considered: · Springing Forward Asset Management Review
Background: · Audit Wales undertook a review into how the Council strategically planned the use of its assets, and how it reviewed and evaluated the effectiveness of its arrangements. · The review was undertaken across all local authorities in Wales and it was noted that the review was undertaken following the Covid pandemic period. The aim was for councils to strengthen their ability to transform, adapt and maintain the delivery of their services in the shorter and longer-term. · The review found that the Council: o Had a clear high-level asset management strategy in place, with links to the Corporate and Strategic Equality Plan. o Was collaborating with internal and external partners on long-term property related initiatives. o Had developed high-level key performance indicators but there was opportunity to align and enhance business plans and performance monitoring. · The Audit Lead (Performance) reported that the review was a positive report, with good examples seen in the strategic asset management strategy. · The Head of Property, Planning and Public Protection welcomed the report and accepted the findings, it was noted that the Service would ensure the recommendations were addressed within appropriate time frames. o Progress on reviewing asset policies and plans had been delayed due to Strategic Property needing to balance these requirements with demands such as managing the return of Heart of Wales Property Services (HoWPS); project managing specific Levelling Up Fund projects; progressing the North Powys Wellbeing Hub; installing a new ICT system; developing the corporate landlord and implementing a thorough review of the fire risk assessment process. o There had also been a reduction in staff resource, such as the removal of the Senior Estate Manager position from Strategic Property. o The Service aimed to progress the review of the Corporate Asset Policy and Farm Estate Delivery Plan by the end of the financial year, which would align the Council’s assets with the Corporate Plan priorities and sustainable aspirations of Net Zero carbon targets. o The medium-term financial strategy was vital as difficult decisions would be required to prioritise service delivery with limited resources. Assets would play a key part in the decision-making process both from a revenue and capital perspective. o Condition surveys had been completed, in addition to Net Zero carbon assessments of the Council’s leisure estate. o 130 of 134 farm estate condition surveys had been completed. o Condition surveys for the care home estate had been commissioned, work was ongoing with Welsh Government to enable condition surveys and Net Zero carbon assessments of the Council’s school estate, with completion planned for the first half of 2024. o There were plans for Service Areas to produce specific asset action plans, to ensure service delivery was at the heart of asset decisions and so the Council made better use of its resources.
Issues Raised by the Committee and Responses Received:
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Corporate Safeguarding Board Activity Report PDF 141 KB To receive and consider a report of the Director of Social Services and Housing. Minutes: Documents Considered: · Corporate Safeguarding Board Activity Report
Background: · The Director of Social Services and Housing provided the Committee with an update on the work of the Powys Corporate Safeguarding Board, for the meetings held 4th August and 15th September 2023. · Progress updates were provided in the report against the actions on the safeguarding regulatory tracker. o Annual Safeguarding Self-Assessment audits were discussed by the Board. o Updates were received on the dashboard to monitor and track actions. o Presentation on the tiered approach to contract management. o Community safety and partnership arrangements. o As part of National Safeguarding Week a conference was hosted by Powys County Council. o Safeguarding themes of the month were to be implemented. o Young Peoples’ housing. o Safeguarding in education and mandatory safeguarding training for adult and children’s social care staff. · Forward Work Programme: o Receipt of the Volunteering for Powys County Council Policy. o Safeguarding vlog for Members and Governors. o The next meeting was scheduled for 14th December.
Observations and Recommendations: · The Chair thanked the Director of Social Services and Housing for providing the regular updates of the Powys Corporate Safeguarding Board. · There were no questions from Members. |
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EDR0011 - Climate Emergency To receive and consider a Risk Deep Dive presentation from the Interim Head of Economy & Digital Services. Minutes: Actions:
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(i) To note the following report from the Governance and Audit Committee Working Groups: · 01-11-2023 Internal Audit Working Group Report.
(ii) To receive an update from the representative to Finance Panel. Minutes: Documents Considered:
Background:
Issues Raised by the Committee and Responses Received:
Observations and Recommendations: · Committee Members noted the Working Group report.
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To consider the forward work programme (attached) and consider whether any additional items should be included. Minutes: Documents Considered: · Governance and Audit Committee Forward Work Programme 2022-2027
Background: · Noted that the following items were due to be considered at the next Committee meeting: o Ysgol Calon Cymru Internal Audit Report (SWAP) o Digital Strategy Review (Audit Wales) o Red Dragon Project Review (SWAP)
Actions: · To add to the Work Programme: o A review into the procedures around the Council’s Whistleblowing Policy. o Presentation on potential changes to the Committee’s work and practices due to changes to the Global Internal Audit Standards.
Observations and Recommendations: · The Chair recommended that the risk deep dives into Strategic Risks EDR0011 and HTR008 be considered together, although they were the responsibility of different service areas, there was crossover between the Climate Emergency and Nature Emergency. |
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Strategic Risk Management - Quarter 2 Report PDF 79 KB To receive and consider a report of the Cabinet Member for Finance and Corporate Transformation. Additional documents:
Minutes: Documents Considered: · Strategic Risk Management – Quarter 2 Report
Background: · The Cabinet Member for Finance and Corporate Transformation provided a high-level overview of the Strategic Risk Management report for Quarter 2. · There were 15 risks listed on the Strategic Risk Register, and all Strategic Risk Owners provided a short summary of progress since the previous quarter to provide assurance that mitigating actions were being actioned and monitored. · Appendix A contained the full details of the 14 Strategic Risks. · Appendix B contained the heat map which provided a visual representation of the level of severity assigned to each Strategic Risk. · Appendix C contained details of Strategic Risk ASC0066 which was not publicly disclosed due to the need to maintain commercial confidentiality. · Of the four Risks with a change in probability, two had increased and two had decreased. · The report also contained details of a Strategic Risk within Children’s Services which was rated as ‘Severe’ (score of 15 or above). ·
Issues Raised by the Committee and Responses Received:
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Exempt Item To consider passing the following Resolution:
RESOLVED to exclude the public for the following item of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007).
The Monitoring Officer has determined that category 3 of the Access to Information Procedure Rules applies to the following item. His view on the public interest test (having taken account of the provisions of Rule 14.18 of the Council's Access to Information Rules) was that to make this information public would disclose information relating to the financial or business affairs of any particular person (including the authority holding that information).
These factors in his view outweigh the public interest in disclosing this information. Members are asked to consider these factors when determining the public interest test, which they must decide when considering excluding the public from this part of the meeting. Minutes: The Committee did not resolve to exclude the public from the meeting as the Strategic Risk Management – Closed Risk item was postponed to the next meeting. |
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Strategic Risk Management - Closed Risk To receive and consider a confidential strategic risk. Minutes: The item was postponed to the next meeting of the Governance and Audit Committee.
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