Agenda, decisions and minutes

To receive any apologies for absence.

There were none.

To receive and note any declarations of interests in respect of any matters included on the agenda for consideration at this meeting.

(The other registrable interests of Councillors of Somerset Council, arising from membership of City, Town or Parish Councils and other Local Authorities will automatically be recorded in the minutes: City, Town & Parish Twin Hatters - Somerset Councillors 2023 )

There were none.

To approve the minutes from the previous meeting.

The approval of the minutes of the meeting held on 28^th September 2023 were proposed by Cllr Andy Sully and seconded by Cllr Mandy Chilcott.

The committee RESOLVED that the minutes of the Audit Committee held on 28^th September 2023 be confirmed as a correct record.

The approval of the minutes of the meeting held on 28th September 2023 were proposed by Cllr Andy Sully and seconded by Cllr Mandy Chilcott.

The Audit Committee RESOLVED that the minutes of the Audit Committee held on 28th September 2023 be confirmed as a correct record.

There were outstanding matters arising from the previous minutes where a response was required and these would be provided electronically as soon as possible:

·     S151 Officer was going to research the history of what happened to the housing underspend reflected on the Sedgemoor District Council 2021-22 Statement of Accounts.

·     David Johnson (Grant Thornton) was going to find out what would affect the value of assets on the Sedgemoor District Council 2021-22 Statement of Accounts.

·     The election expenses which South Somerset District Council (2021/22 Statement of Accounts).

The Chair to advise the Committee of any items on which members of the public have requested to speak and advise those members of the public present of the details of the Council’s public participation scheme.

For those members of the public who have submitted any questions or statements, please note, a three minute time limit applies to each speaker and you will be asked to speak before Councillors debate the issue.

We are now live webcasting most of our committee meetings and you are welcome to view and listen to the discussion. The link to each webcast will be available on the meeting webpage, please see details under ‘click here to join online meeting’.

It was agreed to discuss the questions which had been received from two members of the public, David Orr and Nigel Behan from Unite, at agenda item 6 to which they related. Agenda item 5 was moved up so that the new Independent Member could be introduced.

To receive a verbal update from the Executive Director – Resources & Corporate Services.

A new Independent Member of the Audit Committee had been appointed at the Full Council Meeting on 27 September 2023. Lindy Jansen van Vuuren.

The Executive Director Resources and Corporate Services stated that the Audit Committee decided to appoint 2 independent members. One which is Lindy.  The other post was still vacant the Chair, Vice Chair and The Executive Director would review that in a few months’ time to understand the skills mix and whether there were any gaps and if they had to appoint another Independent Member or not.

Ms van Vuuren then introduced herself highlighting the fact that she worked at the Auditor General’s Office in South Africa which is the equivalent to the National Audit Office. She further explained that her auditing experience has mostly been in government and working with local and metropolitan municipalities.  Ms van Vuuren further affirmed that she had a lot of experience auditing IT(information technology) and had a qualification from the United States, ISACA (Information Systems Audit and Control Association), which is an international professional association focused on IT  governance and specifically targets auditing controls.

A letter to Somerset Council over the financial challenges and risks that Somerset Council are facing to financial sustainability in the short and medium term.

The Audit Committee RESOLVED:-

·     To consider the issues

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raised by the Section 151 Officer in his letter to DLUHC concerning the financial challenges faced by Somerset and agreed to hold an additional meeting in December, along with Directors, to look at and review the current position. The request for an additional meeting was agreed to by the Deputy Monitoring Officer and a date will be advised as soon as possible.

·     To note the findings from Grant Thornton following the letter to DLUHC concerning Somerset Councils Financial Sustainability and the Chair confirmed that he would formally write a letter to the S151 Officer reflecting their concerns.

Public Questions

David Orr was asked to read his statement.

This new unitary council is, according to auditors, facing a section 114 notice from next February onwards. This is the private sector equivalent to “going bust”.

The Conservatives predicted savings of £18m from a new unitary council, yet you are facing an existential crisis within just five months of formation.

The Lib Dems inherited from the County Council Conservatives a £23.4m overspend, while the four District Councils passed over £4.7m of underspends together with their reserves.

There were always concerns about the County Council winning the unitary competition as “a continuing authority”. Would the new unitary council get a fresh start or would the existing County Council management cultures dominate? Would the ongoing and

intractable deficits in social care quickly consume the District Councils’ reserves and underspends?

The deteriorating financial position has worsened by a staggering £4.2m in just one month. This does not indicate good financial controls, or provide confidence that overspends will be tackled and savings made.

The Council has reached for expensive consultants to tell well-paid Executives how to make savings. Adult Social Care is spending £7.5m with Newton Europe to save a claimed

£10m, but probably after the council is “bust”.

In the disastrous South West One outsource to IBM,

£182m of “assured savings” were promised, but never delivered. The Ignite “transformation” programme in Taunton Deane and South Somerset Councils caused service disruption with very high recovery costs.

A private company expecting to go “bust” within a year would show real urgency. Are the unitary savings from combining five councils into one being driven forward with urgency?

There are big savings in reducing management overheads and rationalising a huge property portfolio. What is the position on management overhead cost reductions, and rationalising or renting out the overlapping property portfolio from five Councils, to raise cash and generate income?

There is a great deal of scepticism about the very high levels of “working from home” in the public sector. Should Councils, like the private sector, be moving to hybrid working where some office-based work is required? If the Council is going to have mostly home- based working, then how many offices are now redundant?

A s114 notice could result in 15% council tax rises, huge service cuts to minimum levels, and staff losses with minimal terms and conditions.

Whitehall will send in Commissioners to do the job that this administration is elected to do and the senior officers are paid to manage. Members, the time for

urgent action is now.

David Orr then asked the question: A private company expecting to go “bust” within a year would show real urgency. Are the unitary savings from combining five councils into one being driven forward with urgency?

Councillor Liz Leyshon responded:

Thank you for your informed statement with incorporated questions. First, the Month 5 projected outturn has been revised for Executive and now shows a reduced projected overspend due to a reduction in financing costs. However, the figure is  ...  view the full minutes text for item 43.

Progress report from SWAP on the status of the current Internal Audit Plan, noting any high risks identified since the last report.

The Audit Committee noted the position of the 2023-24 Internal Audit Plan and confirmed that they would take into account the concerns raised surrounding prioritisation of strategic risks and the addition of new items.

The Assistant Director SWAP presented his report highlighting the fact that governance assurance is going to be key.

The Assistant Director SWAP gave his assurance that there were no adverse audit opinions which needed to be brought to the Committee attention since the last meeting.

He confirmed that he would be meeting with the Executive Director Resources and Corporate Services and the Service Director Finance and Procurement to discuss what some of the priorities are to focus on.

He reported that there are some issues around cybersecurity and there is some work to be done around children’s services.

The Independent Member asked if more information could be provided around sector internal audit standards and to report on the scope of the objective of the audit. She pointed out that results needed to be communicated and requested that the details of the findings be included to give the Audit Committee assurance. She further queried if there was a policies and procedures and framework in place and to get an update on that in order to monitor the agreed actions to design a plan to state what the findings were, the agreed action and the due date and whether management was implementing the internal audit findings.

The S151 Officer confirmed that there was a Member’s briefing on this and that the slides will be resent to all Members.

The Audit Committee noted the position of the 2023-24 Internal Audit Plan and confirmed that they would take into account the concerns raised surrounding prioritisation of strategic risks and the addition of new items.

To consider the external auditor’s report on the planned scope and timing of the statutory audit for South Somerset District Council 2021/22 Statement of Accounts for those charged with governance.

Councillor Tim Kerley proposed the amendments to the South Somerset District Council 2021/22 Audit Findings Report which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the South Somerset District Council2021/22 Audit Findings Report subject to the amendments.

Councillor Mandy Chilcott proposed the substantive changes to the South Somerset District Council 2021/22 Audit Findings Report which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the South Somerset District Council2021/22 Audit Findings Report subject to the substantive changes.

The Audit Committee noted the additional fees as set out in the attached Appendix.

Councillor Tim Kerley proposed delegating approval for the South Somerset District Council2021/22 statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to delegate approval for the South Somerset District Council2021/22 statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved.

Councillor Tim Kerley proposed the approval of the South Somerset District Council Letter of Representation 2021-22 subject to there being no material changes to the accounts which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the South Somerset District Council Letter of Representation 2021-22 subject to there being are no material changes to the accounts.

The Director and Public Sector Accounting Head of Audit Quality introduced the report highlighting the fact that there were still a number of areas outstanding and that the audit opinion could not be signed yet.

The key issue is around property valuation s and valuation of investment properties and Grant Thornton were expecting a response on that in the next few days.

There were a number of amendments to the account which were processed. None of which had a significant impact on the financial position reported with the comprehensive income and expenditure account and the largest related to the pension fund revaluation.

The Public Sector Audit Senior Manager Then gave an update on the current position and outstanding matters.

The Chair indicated his disappointment that the accounts had not been finalised.

The Audit Committee RESOLVED:-

Councillor Tim Kerley proposed the amendments to the South Somerset District Council 2021/22 Audit Findings Report which was seconded by Councillor Simon Coles :-

The Audit Committee delegated authority to the Chair to sign off the accounts, subject to there not being any material change to those accounts 

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the South Somerset District Council2021/22 Audit Findings Report subject to the amendments.

Councillor Mandy Chilcott proposed the substantive changes to the South Somerset District Council 2021/22 Audit Findings Report which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the South Somerset District Council2021/22 Audit Findings Report subject to the substantive changes.

The Audit Committee noted the additional fees as set out in the attached Appendix.

Councillor Tim Kerley proposed delegating approval for the South Somerset District Council2021/22 statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to delegate approval for the South Somerset District Council2021/22 statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved.

Councillor Tim Kerley proposed the approval of the South Somerset District Council Letter of Representation 2021-22 subject to there being no material changes to the accounts which was seconded by Councillor Simon Coles.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the South Somerset District Council Letter of Representation 2021-22 subject to there being are no material changes to the accounts.

To consider the external auditor's report on the planned scope and timing of the statutory audit for Somerset West & Taunton Council 2022/23 Statement of Accounts for those charged with governance.

9(b) Audit Findings Report from Grant Thornton - to follow.

Councillor Mandy Chilcott proposed the amendments to the audit findings report for Somerset West & Taunton Council 2022/23 which was seconded by Councillor Mike Caswell.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the Audit Findings Report for Somerset West & Taunton Council 2022/23 subject to the amendments.

Councillor Andy Sully proposed delegating approval for the Somerset West & Taunton for 2022/23statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved which was seconded by Councillor Tim Kerley.

Having been duly proposed and seconded the Audit Committee RESOLVED to delegate approval for the Somerset West & Taunton for 2022/23statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved.

Councillor Norman Cavill proposed the Somerset West & Taunton for 2022/23 Letter of Representation 2021-22 subject to there being no material changes to the accounts which was seconded by Councillor Andy Sully.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the Somerset West & Taunton for 2022/23Letter of Representation 2021-22 subject to there being are no material changes to the accounts.

The Audit Committee noted the additional fees as set out in the attached appendix.

The Manager for Public Sector Audit presented the report  highlighting the fact that the audit was substantially complete and the audit opinion will be unqualified.

She went on to explain that the report highlighted that the value for money work was not yet complete and the auditors annual report would be issued later in the year and there was a letter explaining this delay sent to the Chair and was included in the report.

The report showed two significant risks, the valuation of investment property and the valuation of land and buildings which resulted in some material changes to the accounts being made. Revisions had to be made in the fixed asset register to adjust the financial statements.

The question was asked why the material requirements planning (MRP) was lower.

The Case Officer Support Services explained that it was not surprising that the MRP is lower as year on year it goes up or down. The MRP is based on the close imbalance of the capital finance requirement each year when the budget is set based on the capital budget and the estimated borrowing that was planned.  As often was the case the borrowing may not materialise.  The Case Officer Support Services explained that was how MRP worked in general. The specifics on why it went down for Somerset West and Taunton, he would need to take away and provide a written response to the committee once he had the details.

It was queried as to why the Brewhouse was not included before and the Case Officer Support Services confirmed that this was because it was leased with a third-party organisation. The agreement previously was that it would be included at 0 value and this was at the discretion of Somerset West and Taunton. It was now reviewed because of the responsibility of the Council around maintenance of the building and in his view it was incorrectly included at 0 value and therefore should be revalued and included at its proper value as per a professional value estimate. This had to be included in for this year and done as a prior period adjustment which could not go back longer than one year.

The Audit Committee RESOLVED:-

Councillor Mandy Chilcott proposed the amendments to the audit findings report for Somerset West & Taunton Council 2022/23 which was seconded by Councillor Mike Caswell.

Having been duly proposed and seconded the Audit Committee RESOLVED to approve the Audit Findings Report for Somerset West & Taunton Council 2022/23 subject to the amendments.

Councillor Andy Sully proposed delegating approval for the Somerset West & Taunton for 2022/23statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair, once any outstanding matters have been resolved which was seconded by Councillor Tim Kerley.

Having been duly proposed and seconded the Audit Committee RESOLVED to delegate approval for the Somerset West & Taunton for 2022/23statement of accounts to the Executive Director Resources and Corporate Services in conjunction with the Chair or Vice-Chair,  ...  view the full minutes text for item 46.

To receive a verbal update on the external audit timetable and audit work undertaken, and any outstanding matters on completion of the Statements of Accounts.

The Audit Committee noted the verbal update for Sedgemoor District Council Statement of Accounts 2021/22 being signed on 31^st October 2023.

The Director and Public Sector Head of Audit Quality gave a verbal update of the planned scope and timing of the statutory audit for Sedgemoor District Council 2021/22 audit for those charged with governance and assured the Audit Committee that the accounts would be ready for signature on 31 October 2023.

The Audit Committee noted the verbal update for Sedgemoor District Council Statement of Accounts 2021/22 being signed on 31^st October 2023.

To consider this report.

The Audit Committee noted the Strategic Risk Management Update Report agreeing that the new Independent Member of the Audit Committee receive the new JCAD system training.

The Equalities and Risk Manager presented the report highlighting that there were risks around commercial investment and the cause is rising, interest rates increase, borrowing and debt. The reason for the cause was significant because of the short term borrowing and this seemed to be causing a lot of challenge.

It was agreed that the controls should be presented in a better way so that they are more easily understood.

There was new software and JCAD system in use which the Committee would like to have a run through on and to see how it would benefit the Committee.

The Audit Committee noted the Strategic Risk Management Update Report agreeing that the new Independent Member of the Audit Committee receive the new JCAD system training.

To consider and comment on the Committee’s forward work programme.

The Audit Committee noted the Workplan and RESOLVED:-

·       To hold an additional meeting in December

·       To manage the workload of the extremely heavy agenda in January and plan accordingly.

The Chair went through the document setting out the workplan items for the year ahead and raised his concerns about a heavy agenda for January.

The Audit Committee noted the Workplan and RESOLVED:-

·       To hold an additional meeting in December

·       To manage the workload of the extremely heavy agenda in January and plan accordingly.