Agenda and minutes

Councillor Peter Davies MBE, Matthew Woolfall Jones and Ray Quant MBE apologised for their inability to attend the meeting

None.

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It was reported that Under the Local Authority (Capital Finance and Accounting) (Wales) Amendment regulations 2008, Local authorities were required to set aside ‘prudent’ revenue provision for debt repayment (MRP) where they had used borrowing or credit arrangements to finance capital expenditure. MRP for the Council’s Supported Borrowing was calculated using the Capital Financing Requirement (CFR) as a base. The CFR was a measure of the Council’s underlying need to borrow for capital purposes.

During 2015 a review of the MRP Policy was undertaken which resulted in Council revising the 2015/16 MRP Policy.  The largest element of the MRP relates to historic and supported debt which the Council agreed to provide for on a 2% straight line basis over the estimated life of the assets which was 50 years.

Officers had recently undertaken a further review to ensure that the Policy continues to remain prudent. Details of issues that had been considered during the review was outlined, and the following changes were reflected in the proposed Revised MRP Policy Statement for 2021/22 and would be considered by Council on 17 June 2021.

              i.        Historic and Supported Debt – adopt Option 3 (Asset life method) of the 2018 WG guidance and applying the Annuity Method with an interest rate of 4.20% (the average borrowing rate of loans outstanding as of 01/04/21) over a 44 year period commencing 01/04/2021.

            ii.        New Supported Borrowing – adopt Option 3 (Asset life method) of the 2018 WG guidance and apply the Annuity Method.

           iii.        PFI credit arrangements - adopt Option 3 (Asset life method) of the 2018 WG guidance and apply the Annuity Method.

           iv.        Historic Unsupported Prudential Borrowing – adopt Option 3 (Asset life method) of the 2018 WG guidance and apply the Annuity Method with an interest rate of 3.68% (the weighted average interest rate of the borrowing concerned) over a 38 year period commencing 01/04/2021.

            v.         New Unsupported Prudential Borrowing – adopt average estimated useful life of assets using Option 3 (Asset life method) of the 2018 WG guidance and apply the Annuity Method.

It was AGREED:-

(i) to support the proposed Revised MRP Policy for 2021/22 subject to periodic reviews; and

(ii) that revenue savings be included in the report that will be presented to Council on 17 July 2021,  Audit Wales had agreed to this amendment.

Consideration was given to Quarter 3 Capital Programme Monitoring report which had been presented to Cabinet. The report was presented to the Committee in order to ensure that Committee was aware of the contents of the report, and to provide an opportunity for comment.

Following questions from the floor, it was AGREED to note the contents of the report.

Clarification would also be sought from Customer Services regarding the £150,000 spent on smartphones, this would be reported back to committee accordingly.

Consideration was given to the report on the Audit Wales (AW) Work Programme Update. The report had been presented to provide Members with updates on the            progress with studies the AW had undertaken or were undertaking. This ensured that the Council responded to the AW findings appropriately and agreed that the actions had been completed to the Committee’s satisfaction.

There are two elements to the report:

1) to provide details of progress to date on previous reports from Audit Wales, and

2) to report on current work with Audit Wales.

·         Ceredigion County Council 2021-2022 Audit Plan

·         Local reports received:

o    Audit Wales Certification of Grants and Returns 2019-20 – Ceredigion County Council

National reports received: none

·         Certificates Received: none

·         Management Response Forms in progress/completed:

o   Excel Spreadsheet of MRF Responses 

o   ‘Raising our Game’ Tackling Fraud in Wales (30/7/2020)

o   Review of Public Service Boards (7/10/19)

o   Rough Sleeping in Wales – Everyone’s Problem; No-one’s

Responsibility (23/7/2020)

o   The ‘Front Door’ to Adult Social Care (11/9/19) (Progress in

implementing the Violence Against Women, Domestic Abuse and Sexual Violence Act (21/11/19)

o   Well-being of Future Generations: An examination of the design and implementation of the Council’s Integrated

Services Model – Ceredigion County Council (20/12/19)

o   The National Fraud Initiative in Wales 2018-20 (13/10/20)

o   Welsh Community Care Information System (15/10/20)

Effectiveness of Local Planning Authorities in Wales (6/6/2019)

            Commercialisation in Local Government (6/10/2020)

• Asset Valuation Update (verbal)
• Audit Wales Protocols

1)    Current Work

o   Project Brief- Value for Money of Direct Payments

o   Project Brief- Review of Planning

o   Financial Sustainability Assessment Project 2020-2021

            Audit Wales reiterated their concerns regarding the communication and revaluation issues of the Estate Service raised in several ISA 260 reports in relation to the Statement of Accounts. This information had been requested in January but had not been forthcoming. A meeting had been held with the Chief Executive and AW in March, and they had been given assurance that this information would be available to complete the audit. This also had an impact on finalising the Statement of Accounts for 2020/21. In response, the Corporate Manager – Growth and Enterprise reported that AW were correct in their comments, and valuations had been carried out last October and November, however, they were currently completing the final assessment of the internal process of these valuations. A few issues were required to be addressed, however, he stated that he was confident on the quality of the valuations and their audit trail. Also officers would be available in September to address any issues from AW, therefore the key points in the ISA 260 would be addressed confidently. .

            Members reiterated their concerns on this continued issue, and if there were any further concerns and delays, AW should contact the Chair of the Committee.

It was AGREED to note the reports subject to the following :-

(i) that an update be provided at the September meeting on recruitment ,  communication and revaluation process of the Estates service in order that  ...  view the full minutes text for item 6.

Consideration was given to the Report of the Corporate Lead Officer: Legal & Governance/Monitoring Officer upon the Changes to the Governance and Audit Committee per Local Government and Elections (Wales) Act 2021. The report had been presented to the Committee in order to provide an update on the Local Government and Elections (Wales) Act 2021 and its impact on Audit Committees.

It was AGREED to note:-

(i) the requirements of the Local Government and Elections (Wales) Act 2021 which affect the Committee, including proposed changes to the Constitution.

(ii) the ongoing recruitment process of lay members to the Committee; and

(iii) the requirement for the Mid Wales Corporate Joint Committee to have a Governance and Audit Sub-committee.

Consideration was given to the Report on Annual Governance Statement  2021/22 Progress - Current year Action Plan from Annual Governance Statement. The report had been presented to the Committee in order to provide an update regarding progress with the 2021-2022 Annual Governance Statement and Current Year Action Plan

It was AGREED:-

(i) to note the progress report on actions set out in the AGS; and

(ii) that the AGS would be reported quarterly to the committee in the future.

Consideration was given to the report on the Welsh Government’s Statutory Guidance on Performance and Governance of Principal Councils under Part 6 of the Local Government and Elections (Wales) Act 2021 and publication of consultation responses.

Following question from the floor, it was AGREED to note the contents of the Statutory Guidance regarding the Council’s exercise of its performance and governance functions under Part 6, Chapter 1, of the Local Government and Elections (Wales) Act 2021, including the role and duties of the Governance and Audit Committee.

An update was provided on the County Council Response to Welsh Government Consultation Questions on draft General Power of Competence (Commercial Purpose) (Condition) (Wales) Regulations 2021.

It was reported that the current position regarding the consultation documents were circulated to all Council Political Group Leaders and to the members of the Council’s Governance and Audit Committee on 13 April 2021, with an opportunity provide comments. A Workshop was also held for the Council’s Governance and Audit Committee on 27 April 2021 to provide the Committee with an opportunity to comment.

The Corporate Lead Officer – Legal and Governance/Monitoring Officer informed the Leadership Group of the Consultation on 14 April 2021.

The Council’s Response to the Consultation was being prepared (the Consultation period ends on 11 June 2021) and the Council’s Response, which shall be submitted by the deadline.

The intention of the Welsh Government was to analyse the responses to the consultation over the summer and consider whether any changes may be required before laying the draft regulations in the autumn. It is then intended that they be brought into force on 1 November 2021, in line with the commencement of the GPOC for principal councils.

It is intended to amend the draft Regulations between November 2021 and May 2022 so as to extend their application to eligible community councils. 

Following a question from the floor, it was AGREED:-

(i) to note the updated report upon the Consultation on the draft General Power of Competence (Commercial Purpose) (Conditions) (Wales) Regulations regarding Part 2 of the Local Government and Elections (Wales) Act 2021;

(ii) to note that the Committee had received the Council’s Response to the Consultation; and

(iii) to note that it was envisaged that further guidance from Welsh Government in relation to the eligibility of Town and Community Councils on their competence for GPOC would be received in due course.

Consideration was given to the report of the Corporate Manager-Internal Audit on the Internal Audit Progress Report Quarter 4 (1/1/2021-31/3/2021). The report had been presented to ensure that the Committee was satisfied that the Internal Audit Section was undertaking sufficient and appropriate work in order to provide a realistic assurance at year-end, whilst adding value and assisting the Council in achieving its objectives.

It was AGREED to note the work undertaken and current position of the Internal Audit Section.

Consideration was given to the Internal Audit Annual Report 2020/21. The Annual Report provided a summary of the internal audit activity during the year to 31 March 2021 and incorporates the audit opinion.

It also documents the current resource position, and the Section’s quality, improvement and progress plans.

It was AGREED :-

(i) to approve the report;

(ii) that the internal audit service seeks an explanation regarding the communication problem that arose within the estates service, that led to the delays in providing information to Audit Wales; and

(iii) that the quarterly internal progress reports continue for the forthcoming year, along with the annual report, in order to ascertain the work of the service at full capacity.

Consideration was given to the Internal Audit Annual Counter Fraud Report 2020/21. It was reported that the report supports the Annual Report & outlines the counter fraud work IA have been involved in during the year.

It was AGREED to approve the report.

Members were of the opinion that all services should adopt this style of report when presenting to committees as it was clear and concise to the reader. This message would be relayed to Leadership Group.

It was reported that the Internal Audit Section recently reviewed the Council’s Risk Management Framework and the supporting corporate procedures in place during the 2020/21 financial year.

Only minor actions were identified, one of which was actioned immediately, resulting in the Internal Audit Section providing high assurance that there is a sound system of controls, governance and risk processes in place.

It was AGREED to note the content.

A review had recently been undertaken of the Framework supporting the Annual Governance Statement (AGS) for 2020/21.

The Governance Framework, AGS and Local Code of Corporate Governance were presented to the Committee in February 2021. Members of the Committee were also involved in its review. 

Audit Wales provides an audit opinion on the AGS based on its consistency with their knowledge and compliance with legislation.

The Internal Audit review consists of an assessment of the procedures in place to compile the governance framework, the scoring methodology used, and consideration of the ‘evidence’ noted in the framework. 

This review therefore complements AW’s work on the AGS, and provides assurance that the procedure is robust, focussed and effective.

It was AGREED to note the content.

It was reported that Ceredigion County Council had a duty to the public to safeguard money that should be used in the public interest. To assist organisations achieve this by addressing their risks to fraud, CIPFA had produced a Code of Practice on Managing the Risk of Fraud and Corruption. 

The Code states that an organisation needs a counter fraud strategy setting out its approach to managing risks and defining responsibilities for action. 

This document was intended to serve this purpose, and applies to all employees, elected Members and Lay Members of the Council.

It was AGREED to endorse the Strategy for presentation to Cabinet and Council for final approval.