Meeting Details

Apologies for absence were received from Councillor King, Councillor Byatt attended as substitute. 

Apologies for absence were received from Councillor Grey, Councillor Molyneux assumed the Chair. 

On the proposal of Councillor Lynch, seconded by Councillor Reeves it was

RESOLVED

 
That the minutes of the meetings held on the 30 September 2024 be agreed as a correct record 
and signed by the Chair. 

The Committee received report ES/2183 of the Cabinet Member with responsibility for Resources and Value for Money which related to the finalisation of the 2021/22 and 2022/23 Statement of Accounts and Annual Governance Statement.

Councillor Langdon-Morris introduced the report. Owing to delays in local audit a backstop date of 13 December 2024 had been agreed. For East Suffolk Council this related to the 2021/22 and 2022/23 Statement of Accounts and Annual Governance Statement. Ernst and Young's report included a disclaimed opinion on these accounts. One completion report had been provided which covered all open years.

Mr Paylor (Ernst and Young) summarised the report contents and highlighted the weakness identified in 2021/2022 which related to non-compliance with the rent standard. Procedures had been put in place to manage this for 22/23 and going forwards. 

Councillor Byatt referred to the City Fibre revenue expenditure and asked whether the Council could hold them to account over completion of this work. Councillor Byatt also asked whether any of the audit work required the result of inadequate staff resourcing within the Council. The Chief Finance Officer confirmed that the finance team had been challenged by producing the two years at the same time as the 23/24 audit, but they had completed everything on time. Regarding City Fibre, this money had been paid to Suffolk County Council. 

Councillor Lynch stated that this was another delay and asked how the committee could be reassured work would be completing on time, and whether the Council would be charged more money for this. The Chief Finance Officer stated they were working to the backstop date. Fees were set by Public Sector Audit Appointments, and fees and charges were being considered for the backstop years. Mr Paylor stated this was a national issue, there were capacity issues across the sector and increasing regulatory requirements that had led to this position. Everything would be completed by the backstop date. Errors were corrected as they were identified, they would not be carried forward and charged for. Councillor Lynch stated it was not the Council's issue that Ernst and Young did not have the staffing, this was their responsibility to ensure they had the staff to do the work. 

Councillor Gandy asked that if Ernst and Young could not fulfil their requirements were they not required to pass on this work. Mr Paylor stated that the 2021 audit was not signed due to issues within the Council, including the Value for Money issue. Whilst Ernst and Young was not fully on track, this was an issue for all firms nationally. 

The Chief Executive stated this was a national audit issue and no one was happy with it on any side, and it was the result of national changes which had reduced the affordability and attractiveness of public sector audit.

Councillor Gandy asked if the disclaimed opinion affected the committees ability to be confident in the accounts. The Chief Executive stated a number of Councils would be in this position, although it was not optimal, officers were content.

On the proposal of Councillor Back, seconded by Councillor Reeves it was

 RESOLVED

That the Audit and Governance Committee: 
1. Approved publication and sign off of the disclaimed Statement of Accounts for 2021/22 and 2022/23 following the completion of EY’s final Audit Completion Report on the 11 December 2024. 
2. Noted the changes to the statement of Accounts which occurred between the final and disclaimed accounts for 2021/22 & 2022/23.

The Committee received report ES/2185 of the Cabinet Member with responsibility for Resources and Value for Money which set out the Council’s Treasury Management Strategy for 2025/26 and the Treasury Management Investment Strategy for 2025/26. The repot included details on the current treasury position, treasury indicators, prospects for interest rates, the borrowing strategy and the investment strategy.

Councillor Byatt asked if all the Council's investments were ethical. The Specialist Accountant stated strategic funds were placed with CCLA and they had provided some information on ethical investments for these. These would be passed onto the committee.

Councillor Lynch stated that £14million was kept in instant access accounts, why had more money not been moved to to sixty five day notice accounts which achieved a higher rate of return. The Specialist Accountant stated that cash flow varied greatly and keeping a balance for instant access allowed the Council to respond quickly. Cash flow was monitored daily, and the return on this was better than it had been before. Councillor Langdon-Morris added that there were cases where £6-8million had been paid out in a short time so this amount was necessary.

Councillor Molyneux asked whether we had any investments that were at risk with other local authorities. The Specialist Accountant confirmed we had an internal risk register for this and all of them were ‘green’ at the moment. 

Councillor Byatt asked if there would be a similar spread of investments when these ones closed down. The Specialist Accountant stated that the base rate had been reduced, but the market for local authorities had increased so the outlook was relatively positive. 

On the proposal of Councillor Lynch, seconded by Councillor Speca it was

RESOLVED

That the Audit & Governance Committee: 
1. Recommend the Treasury Management Strategy Statement and the Treasury Management Investment Strategy for 2025/26 to Full Council for approval. 

The Committee received report ES/2184 of the Cabinet Member with responsibility for Resources and Value for Money which gave a high-level overview of how capital expenditure, capital financing and treasury management activity contributed to the provision of local public services in East Suffolk, along with an overview of how associated risk was managed.

Councillor Byatt asked whether additional training be given to members of the committee, or whether it was possible to require a basic minimum of training.

On the proposal of Councillor Byatt, seconded by Councillor Speca it was

 RESOLVED

That the Audit & Governance Committee: 
1. Recommend the Capital Strategy 2025/26 to 2028/29 to Full Council for approval. 

The Committee received report ES/2186 of the Cabinet Member with responsibility for Resources and Value for Money which gave an overview of the Council’s Corporate Risk Register.

Councillor Lynch referred to the risk relating to the Lowestoft tidal barrier and asked when would this be reduced from red. The Chief Finance Officer confirmed that the Council had now received assurance this would be paid, the next step to draw down the funding was quite lengthy and so this would take some time.

Councillor Gandy asked if the Council was lobbying government about the tidal barrier and what the response had been. The Chief Executive stated this risk related to lobbying through all avenues, and the Council was working with the local MP on this. Funding had been announced nationally, but there was a big list of projects which would be able access this. 

Councillor Lynch referred to the new risk of civil unrest and asked where this had come from. The Head of Digital, Programme Management and Customer Services confirmed this was a result of incidents in the last few months across the UK. The risk level had been lowered recently as the national picture had calmed. 

The Chief Executive stated that Councillor Grey had been kept up to date with discussions about risk management so he was more aware of how things were progressing rather than the twice yearly snapshot the committee received.

Councillor Byatt asked that councillors be kept informed of any risks that might impact them in their local communities. 

Councillor Lynch asked if the next report could include information on what the score for each risk had been in the previous report so the committee could see the trends.

On the proposal of Councillor Lynch, seconded by Councillor Gandy it was

RESOLVED

 That Audit and Governance Committee:
1. Noted the corporate risks from the Council’s current Corporate Risk Register (CRR) which was governed and monitored by the Corporate Leadership Team (CLT). 

The Committee received report ES/2187 of the Cabinet Member with responsibility for Resources and Value for Money which related to upcoming changes and the proposed timetable to transition to new internal audit standards and code of practice.

On the proposal of Councillor Gandy, seconded by Councillor Thompson it was

RESOLVED

The Committee received report ES/2188 of the Cabinet Member with responsibility for Resources and Value for Money which presented progress and updates to the Internal Audit Plan 2024/25.

Councillor Langdon-Morris stated that the internal audit team had been working well in the last six months and this was reassuring considering the delays in external audit.

Councillor Byatt asked if there was any update on the progress of audits into port health and cyber security. The Head of Internal Audit stated that a IT specialist had been employed from an agency to look into this specifically.

Councillor Lynch asked if the plan was achievable with the current resource. The Head of Internal Audit stated that the plan had been amended to take into account resources, it would be sufficient to give an internal audit opinion. There were currently adverts for two additional staff members. 

On the proposal of Councillor Back, seconded by Councillor Reeves it was

 RESOLVED

That Audit and Governance Committee:
1. Reviews the current Internal Audit Plan 2024/25 activity and provides any comments.
2. Endorses the current Internal Audit Plan 2024/25 following the changes incorporated since it was first approved in March 2024.

The Committee received report ES/2189 of the Cabinet Member with responsibility for Resources and Value for Money which provides Members with progress on all Internal Audit actions agreed by management.

The Head of Internal Audit confirmed there were no overdue or outstanding actions, some actions were in progress but should be completed on time. 

The Chair stated he was very pleased there were no overdue or outstanding actions on this report. 

 RESOLVED

That the Audit and Governance Committee considers whether any further action or explanation is necessary from service areas to ensure that agreed actions to improve East Suffolk Council’s control environment are made. Where no further action or explanation is deemed necessary, that the Committee notes the report.

The Committee received report ES/2191 of the Cabinet Member with responsibility for Resources and Value for Money.

The Head of Internal Audit introduced the four reports which related to Disabled Facilities Grant Certification 2024-25 (relating to 2023-24 expenditure), Heritage Action Zone – Lowestoft Cultural Programme Funding Certification 2024-25, Heritage Action Zone – Lowestoft High Street (South) Funding Certification 2024-25, Suffolk County Council COVID-19 Grant Funding Certification 2024-25 (covering 2023-24 and 2024-25 financial years).  

Councillor Lynch asked why the report was only partially compliant on payments from Suffolk County Council. The Chief Finance Officer stated that as this money had been received slightly later than expected and so this had reduced the opinion down.

On the proposal of Councillor Byatt, seconded by Councillor Lynch it was 

RESOLVED

That Audit and Governance Committee considered and commented upon the four presented Internal Audit report(s).

On the proposal of Councillor Gandy, seconded by Councillor Reeves it was

RESOLVED

That under Section 100A(4) of the Local Government Act 1972 (as amended) the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A of the Act.