Meeting Details

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

RESOLVED

That the minutes of the meetings held on 9 December 2024 and 17 February 2025 be accepted as a true record. 

The Committee received report ES/2332 of the Leader of the Council which related to the appointment of co-opted members to the Committee.

The Head of Internal Audit introduced the report and stated that the Chartered 
Institution of Public Finance and Accountancy (CIPFA) recommended that audit committees should include two co-opted independent members as recommended by the National Audit Office and the Redmond Review. Independent members did not have voting rights and they were paid per meeting in line with the amount paid to other co-opted members. 

Councillor Gandy stated she supported this idea and asked why there was a stipulation that anyone applying must not be a member or an officer of any other local authority, as officers of other local authorities could stand as a member in another area. The Head of Internal Audit stated this was to ensure full independence and that there could be no perception of undie bias. The Chief Executive accepted this point and stated that they would check national guidance for restrictions, for example there might be restrictions about people being a member of a political party. 

Councillor Gandy stated that she felt there should also not be a restriction on political membership as the Audit and Governance Committee was not a political committee. The Chief Executive recognised that Audit and Governance was not a political committee but it was appointed by the Council in accordance with the political makeup of the council. 

Councillor Thompson stated that he felt remuneration should be more generous to attract better candidates and as a reflection of their responsibility. The Head of Internal Audit stated that the remuneration was the same as co-opted members of other committees. The Chair stated he was happy to keep this in line with other committees. The Monitoring Officer confirmed that the Independent Remuneration Panel had made recommendations on the co-opted members allowances and agreed that it should be 1.75% of a member allowance.

Councillor Speca stated he was unsure of the value of independent members of the committee, and what the advantages were above having officers in attendance. In principal there was no issue, but not clear on what this would achieve in practise. Councillor Back stated that he had experience working with independent members at county, if the right members were appointed with the right qualifications they added significant value to the committee. Councillor Reeves stated that he understood that this was becoming mandatory, and he agreed that independent members could add substantial value to the committee. 

Councillor Gandy stated that they had previously struggled with the attendance for the committee, and having two additional members would be beneficial. It would also be beneficial to add more members of the community to the committee. 

Councillor King asked what background most independent members tended to have, and expressed concern about independent members potentially being individuals who had been removed from other councils or parties. The Chair asked what vetting there would be to ensure this would not happen.

Councillor Speca stated that lack of engagement on behalf of committee members could not be solved by independent members. He had nothing particularly against it, but remained to be convinced. The Chief Executive stated that he had previously been quite neutral to independent members but had seen the value they added in other councils in providing a different viewpoint to the committee members.

The Head of Internal Audit confirmed that while it was not mandatory to have independent members at the moment, it was likely that it would become mandatory in the future and this was being considered by government. Independent members tended to bring risk or actuary skills to committees. The Chair agreed this was quite common practise and he was willing to try this. The Chair asked that full criteria for the independent members be confirmed before this was put to Full Council for confirmation.

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

RESOLVED

The Committee received report ES/2333 of the Cabinet Member with responsibility for Resources and 
Value for Money which reviewed the performance of the treasury management function for the last quarter. 

The Specialist Accountant introduced the report. Total investments were £145.90m, made up of £78 million in short-term investments, £19.56million in long-term investments and £48.34 in liquidity investments. Interest on investments totalled £2.72million (86%) against a total year budget of £3.15million. The Principal Loans portfolio totalled £63.32million, repayments of principal due during the quarter was £2.08m. It was noted that table 3.16 in the report should  show £2.08m and not £0.08m under the repayments during quarter column. No new additional borrowing was taken out during the quarter.  The Council continues to operate its Treasury Management function within the key principles of security, liquidity, and yield.

Councillor Speca asked if we had considered the reputational risk from some of our investments and the institutions that held them. Councils were perhaps more limited in the type of institutions they could hold money with but there was public feeling about investments as they related to the Gaza conflict for example. The Specialist Accountant commented that this committee had previously raised concerns about ethical investments, and we were limiting investment as a response. Comments were taken on board and funds restricted as appropriate. 

The Chief Executive added that a similar question had been raised during the budget. The Council held investments with UK Banks and Building Societies, local authorities and two pooled investment funds. Whilst we could not monitor or direct where the financial institutions invest their funds, the Council does not have any direct investments with fossil fuels companies or companies that produce ammunition that could potentially be used in the conflict in Gaza. The Councils external treasury advisor, Arlingclose, had confirmed that the Council does not invest any surplus cash in Israeli companies or investment funds. Israel’s credit rating was below the Council’s minimum criteria and so this was unlikely to change in the future. It is not feasible for the Council to know the full business dealings of banks and can only use published evidence from the banks themselves. The CIPFA Code of Practice on Treasury Management requires the council to focus on security, liquidity, and then yield, whilst ensuring the ethical and environmental aspirations of the Council are also taken into consideration where new investments in pooled funds is sought. The Council’s position remains, that the Treasury function of the Council continues to follow the CIPFA code of practice and any direct steer from the Ministry of Housing, Communities and Local Government and external treasury advisor, and it will continue to use the approved counterparties for day-to-day banking and surplus cash investments. Where the council could take action it did to ensure investments were ethical and environmental. 

Councillor Speca appreciated the thought that had been put into this but thought this might need to be monitored more closely due to the potential reputational risk. 

Councillor Gandy referred to the upcoming spring statement and asked how this impacted our investments. The Specialist Accountant stated that the council ensured its investments were locked out for as long as possible, and additional money market funds had been sought as these were higher yield. The Specialist Accountant stated the council should achieve its budgeted income. 

Councillor Reeves asked about the investment portfolio with other councils and asked if reorganisation would impact this. The Specialist Accountant stated this would be a few years away and our investments were generally shorter term. Any investments we had would move over to the successor authority. 

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

RESOLVED

That the Audit & Governance Committee
1. Approved the quarter 3 report on the Council’s Treasury Management activity for 2024/25.

The Committee received report ES/2334 of the Cabinet Member with responsibility for Resources and 
Value for Money which summarised the proposed annual Internal Audit Mandate, Charter, Strategy and Plan for the 2025/26 financial year.

The Head of Internal Audit introduced the report and summarised the main changes that had been made. The Audit Strategy was risk based and so would move as appropriate. The work undertaken did vary but was aligned with the Council's strategy and themes. Work was categorised as either high/medium/low and adjusted as necessary. The Head of Internal Audit highlighted the areas which would be covered, these were based on risk assessments which were updated monthly to ensure the higher risk areas were being considered. 

Councillor Lynch asked if there were enough resources in the internal audit team to deliver this plan. The Head of Internal Audit stated the service had the minimum resources and there were currently two vacancies. It was difficult to recruit to audit generally and these positions had been vacant for a while. Agency staff were employed where necessary. 

Councillor Lynch referred to the proposed review of the planning enforcement process, and asked what the timescale was for this as this was often a concern for councillors. The Head of Internal Audit stated the times for this had not been confirmed, the committee would be informed when it was arranged. 

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

RESOLVED

That the Audit and Governance Committee:
1. Reviewed and approved the updated Internal Audit Mandate and Charter (Appendix A of this report), and
2. Reviewed and approved the Internal Audit Strategy and Plan 2025/26 (Appendix B of this report)

The Committee received report ES/2335 of the Cabinet Member with responsibility for Resources and 
Value for Money which provided a refresh of the Covert Investigation Policy and associated procedures to ensure they reflect current practices and processes.

The Head of Internal Audit introduced the report. The Covert Investigation Policy enables the Council to undertake covert surveillance of individuals where appropriate. The power could be used in a variety of areas such as suspected illegal licensing or fly tipping. The Head of Internal Audit confirmed that there were a series of checks in place to ensure this was used proportionately. 

Councillor Gandy asked how this worked and how officers could use this process to ensure a thorough investigation as it seemed to be helpful for issues such as flytipping. The Head of Internal Audit confirmed that officers in these roles were trained, but this was generally a last form of action and had to be balanced against human rights. Officers had to demonstrate they had tried all other options.

Councillor Reeves asked how many times this had been used. The Head of Internal Audit confirmed it had been used once. Two other instances had been applied for but had ultimately used other powers.

Councillor Speca stated he was pleased to the see the emphasis on human rights and safety of the public. He asked how officers involved in this were kept safe in any situation they might find themselves in, for example if a convert investigation was uncovered by the person being investigated and asked if some information on the safeguarding of officers could be added. The Head of Internal Audit stated the council did not use covert human intelligence services, such as an individual reporting their observations or relationships, this was in the arena of the police. Most of this investigation was done using digital open source tools, and this generally kept people safer. Safeguarding was a fundamental part of this, and was covered in the training and in discussions when officers made an application for covert investigation. 

Councillor Lynch asked where we defined when an investigation was in the purview of the council and where something would be handed to the police. The Head of Internal Audit confirmed that council powers were quite clearly defined, anything outside this was passed across to the police, or other bodies such as HMRC or customs.

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

RESOLVED

That the Audit and Governance Committee:
1. Reviewed and endorsed the refreshed Covert Investigation Policy attached as Appendix A

The Committee received report ES/2336 of the Cabinet Member with responsibility for Resources and 
Value for Money which provided details of how the Corporate Fraud Team would deliver work to support the aims and objectives of the current East Suffolk Council Anti-Fraud and Corruption Strategy approved in December 2023.

The Head of Internal Audit introduced the report and highlighted the work that took place under each pillar set out in CIPFA guidance. The plan was also aligned to the Council's Strategic Plan.

Councillor Lynch commented on the changes in council tax rules relating to second homes and holiday properties and asked how this would impact the service. The Head of Internal Audit commented that some aspects was undertaken by the fraud team at Anglia Revenues Partnership, any that linked in with other services such as housing involved this team. 

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

 RESOLVED

That the Audit and Governance Committee:
1. Reviewed and endorsed East Suffolk Council’s Corporate Fraud Annual Plan 2025/26.

The Committee received report ES/2337 of the Cabinet Member with responsibility for Resources and 
Value for Money which provided an overview of the planned work to be undertaken from April 2025 to March 2026 by Information Governance services, based on annual core activities and project/initiatives identified as part of the 2024/25 Information Commissioner’s Office self-assessments.

The Head of Internal Audit introduced the report. This had previously split but now covered data protection, freedom of information and environmental information regulations. The Head of Internal Audit highlighted charts which showed the type of issues this department were involved with. 

Councillor Gandy asked how breadth of work impacted the resources in the team. The Head of Internal Audit confirmed she had a deputy manager who oversaw this work, and some members of the customer services team had been moved across sit in the information governance team, and they only dealt with this. 

Councillor Lynch asked what people could do with the information received under Freedom of Information (FOI) requests. The Head of Internal Audit confirmed that anything issued under FOI was in the public arena, the point of the act was to ensure information was public and transparent. The Head of Internal Audit confirmed there were a number of qualifications in the FOI act limiting what could be shared in the first place, for example peoples names would not be made public.

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

RESOLVED

That Audit and Governance Committee:
1. Reviewed and commented upon the Annual Information Governance Plan 2025/26.

The Committee received report ES/2338 of the Cabinet Member with responsibility for Resources and 
Value for Money which provided the result of an external quality assessment of the internal audit function.

The Head of Internal Audit introduced the report. An external assessment was carried out every five years to ensure the internal audit team complied with the public sector audit standards. The assessment confirmed the team were compliant and were delivering the standard expected.  There were 177 tests carried out and the Chair of the committee had also been interviewed. There were four recommendations, three had been completed already. 

The Chair congratulated the team on their good report. 

Councillor Lynch agreed that this was an excellent report, especially in line with the issues with external audit and asked that all councillors be made aware of this report so that they were aware of the good work of the service. The Chair confirmed he would circulate this and would ask Councillor Langdon-Morris to announce this at full council. 

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

RESOLVED

That the Audit and Governance Committee:
1. Reviewed, commented upon and noted the External Quality Assessment and its conclusion that East Suffolk Council’s internal audit function conforms with Public Sector Internal Audit Standards.

The Committee received report ES/2339 of the Cabinet Member with responsibility for Resources and 
Value for Money which provided Members with progress on all Internal Audit actions agreed by management. 

The Head of Internal Audit introduced the report and noted there were no overdue actions, since the previous report eleven actions had been agreed and eight actions had been closed. 

Councillor Molyneux asked if the was any information on how the service area had improved and what the impact of improvements had been. The Head of Internal Audit confirmed the outcome her team was looking for was for a problem being fixed and this was evidenced to the committee before an action was closed. 

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

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.