Agenda, decisions and minutes

1.1  Apologies for absence were submitted on behalf of Councillor Michelle Gregory.

2.1  There were no declarations of interest.

3.1  The non-confidential minutes of the meeting on 5 January were agreed as a correct record.

  Matters arising – Actions from the previous meeting

3.1.1  Housing Revenue Account

3.1.2  The Director of Neighbourhood and Housing Finance reported that the update on housing repairs had been circulated to the Committee. The Strategic Director of Housing would respond in writing to the question at 8.12 of the minutes.

3.1.3  The Governance Officer would seek an update on the action at 3.1 of the minutes

RESOLVED:

·  To approve the Council’s 2020/21 Statement of Accounts subject to the

finalisation of audit processes and resolution of the infrastructure asset

issue referred to at paragraph 6.2.

·  To approve that the Group Director of Finance and Corporate Resources be authorised to agree and approve the final Statement of Accounts for 2020/21 subject to the finalisation of the external auditor’s outstanding work as set out in their Audit Update Report (Council) and Initial Audit Completion Report (Pension Fund) and resolution of the issue in relation to infrastructure assets.

·  To approve, in its own right, the Annual GovernanceStatement contained within the Statement of Accounts.

4.1   Jackie Moylan introduced the report, highlighting the following:

·  The accounts were submitted later than expected due to impacts of the Cyber attack on the Council’s systems;

·  An increase in general reserves between 2020 and 2021 by 22m mainly attributable to the fact that grant was received in respect of additional release held in reserve and set aside to meet a deficit accrued;

·  A large deficit in the collection fund;

·  The Pensions fund accounts were considered by the Pensions Committee in November 2021 and it was the Audit Committee’s role to approve the accounts;

·  The net assets of the Pensions Fund had increased between 2020/21 by 370m. The first impacts of the Pandemic were seen at the end of 2020 with an artificial low in the figures and an increase since that time;

·  In regard to the Annual Governance Statement there were a number of actions that were required to be addressed relating to:

-  The corporate impact of the Cyber attack;

-  The delay in the submission of the Statement of Accounts;

-  Cost pressures in Adult Care and Education;

-  The Impact of the Ofsted judgement;

RESOLVED:

·  To approve the Council’s 2020/21 Statement of Accounts subject to the

finalisation of audit processes and resolution of the infrastructure asset

issue referred to at paragraph 6.2.

·  To approve that the Group Director of Finance and Corporate Resources be authorised to agree and approve the final Statement of Accounts for 2020/21 subject to the finalisation of the external auditor’s outstanding work as set out in their Audit Update Report (Council) and Initial Audit Completion Report (Pension Fund) and resolution of the issue in relation to infrastructure assets.

·  To approve, in its own right, the Annual GovernanceStatement contained within the Statement of Accounts.

RESOLVED:

To note the report.

5.1  Suresh Patel highlighted the following:

·  That good progress was being made on both audits, anticipated to be completed by early May 2022;

·  A national issue had arisen preventing all Audit Firms from completing Local Authority audits. A CIFPA Task and Finish Group  was currently considering this matter with an outcome expected in early June;

·  There were no matters of concern in relation to Value for Money.

·  There had been no instances where the Council was not able to supply sufficient evidence;

5.2  Stuart highlighted the following:

·  Pensions had been reviewed but would not be completed until the Pensions Fund audit was completed;

·  Movement in the Reserve Statement had been completed and was to be reviewed;

·  Much of the Payroll work had been completed and was to be reviewed;

·  Work on valuations was ongoing;

·  Work on debtors provision was now complete;

·  Cash and bank, collections and reserves had been finalised;

·  Administration and Internal Investment had been reviewed;

·  Investment assets had been largely reviewed;

·  Approximately 2 items were awaited.  

5.3  In response to Chair Suresh Patel confirmed that, except for   infrastructure assets the Auditors were satisfied with the accounts.

5.4  Councillor Smyth asked for clarification on what areas were outstanding  in relation to ‘Management Override of Controls’.

5.5  Stuart reported that work was ongoing on items 1 and 3 and debt provision.  

5.6  Councillor Lynch referred to the risks and challenges around Adult Social Care, temporary accommodation and Income streams. She stated that she was reassured by the Auditor’s report.

5.7  The Chair stressed that delay in the production of the accounts undermined the political importance and accountability to the public that that there was a need for a timely process in relation to the production of the accounts.  He asked for progress on the current Audit and for reassurance that Mazars had addressed the issues facing them .

5.8  Suresh Patel confirmed that the Organisation was getting on track with the allocation of sufficient resources and a timetable in place to ensure completion with a report to the Audit Committee in November 2022.   

5.9  Councillor Gordon asked for detail of any additional implications of the Cyber attack. Suresh Patel confirmed that a report on this matter would be made to the future meeting of the Committee.

5.10   Councillor Smyth asked for clarification on what measures were in place to mitigate the impact of the Cyber attack on the provision of services.

5.11  The Group Director of Finance and Resources highlighted:

·  Work was ongoing on the protection of Income Streams;

·  Additional support was in place to ensure that residents in difficulty are supported;

·  Significant investment in terms of the HRA with support on rent payment;

·  Support provided by the Council Tax Team;

·  Success in the allocation of all discretionary payment of housing monies;

·  Monies from the hardship funds was being utilised.

RESOLVED:

To note the report.

6.1  The Group Director of Finance and Resources highlighted the following:

·  An overspend of £4.96m for 2021/22 (A reduction of £6.5m)

·  The main areas of overspend related to COVID-19, the Cyber attack and the pressures on Social Care;

·  A breakeven position was forecast on the HRA:  

·  A further £500m had been allocated to Local Authorities. The allocation to Hackney had not yet been confirmed;

·  There was continued uncertainty over future funding level;

·  The 2020/21 Audit was nearing completion. The preparation process for the 2021/22 Audit had begun;

6.2  The Chair stated that the uncertainty in future funding was reflected in the circumstances facing Hackney residents. He considered that the new Hackney Administration would face a considerable period of uncertainty with pressures on housing, children and adult services.  

6.3  Councillor Gordon referred to the impact of the cost of living crisis on residents and the Council’s finances as a consumer.

6.4  The Group Director of Finance and Resources highlighted the following:

·  The Council was a significant consumer facing pressures on its own resources;

·  The Council was ensuring that its processes were sensitive to the challenges that Hackney residents were facing, utilising resources in the Hardship Fund and its’ own resources to support;

·  A Council Tax rebate of £150 was available to residents;  

·  The Council was considering ways to mitigate reliance on current energy sources;

·  Pressure in Adult Social Care;

·  An update would be made to the July Cabinet meeting.

6.5  Councillor Lynch referred to the impact of the change to National Insurance. She stressed the need to seek feedback from residents on Council services provided to input into any transformation together with Audit Committee work on Value for Money.

6.6   The Group Director of Finance and Resources highlighted the following:

·  Ongoing work on the SEND budget with successful lobbying in this area. A shortfall still existed.

·  The Council was considering how it used its facilities to reduce reliance on the private sector and to deliver the expected outcomes;

·  A pay ward was delivered at an earlier time to the changes to National insurance took effect;

6.7   Councillor Smyth asked for clarification in regard to the use of the Housing Support Fund of £2.8m. It was clarified that this amount had now been spent.

RESOLVED:

To note the performance indicators, the Risk Management Scorecard and the current monitoring update.

5.1  Bruce Deville introduced the report providing an updated set of key performance indicators together with an update on risk management with a Corporate Scorecard summarising high risks and some accompanying commentary on the Council’s risk approach. The report also set out the latest capital programme monitoring and an analysis of forecast spend to the original and revised budgets. He highlighted the following:

·  High levels of staff sickness;

·  High levels of rent arrears;

·  Continued pressure for the Planning Department to meet local targets although statutory targets were being meet;

·  Income from PCNs had increased;

·  Work was to commence on measures of performance management across the Board with an increased outcomes focus;

7.2  The Chair expressed concern that the level of rent arrears continued to

increase and stressed that Council Tax income was important to the Council’s viability. He referred to the fact that making contact was essential. He asked for any forecast in relation to quarter 4.

7.3  The Director of Neighbourhood and Housing Finance told the Committee there had been a slight reduction in arrears from the end of quarter 3 to £15.2m. Productivity measures were now in place with a target of 1400 home visits per month with an increase in notices and reminder letters. Households would be signposted to sources of support. In relation to quarter 4 a marginal improvement was expected. The impact of the new arrangements would be tracked and those tenants who could afford to pay rent would be targeted.

7.4  Councillor Lynch stressed the need to consider how to deal with staff absence within the existing workforce. She queried whether the Workforce Strategy had been prepared.

7.5  The Group Director of Finance and Resources highlighted:

·  That Human Resources was ensuring that all managers were aware of the position with regard to sickness in particular long standing cases. 50 top cases had been identified, considering ways to address;

·  A process was in place to assist those staff make choices they need to make and that managers are confident in this process;

·  An update on sickness levels would be made to the next meeting.

Action: The Group Director Finance and Resources 

7.6  Councillor Gordon asked for an update on the backlog of Housing Benefits cases.

7.7  The Group Director of Finance and Resources told the Committee that it was expected that those cases affected by the Cyber-attack would be cleared in the coming weeks. There would, however, continued to be the challenge of legacy cases.  

7.8  The Chair stressed the need to a review of data sources on performance

  and that the matter could be taken up by the new Chair.

7.9   Jackie Moylan highlighted the following:

·  Construction

·  COVID-19

In response to the Chair she confirmed that if these factors were removed the target set would have been met.

7.10  The Chair emphasised that among the reasons for the decrease in housing capital was to fill the deficit which would impact on repairs and the state of stock.

7.11  The Corporate Risk Adviser highlighted the  ...  view the full minutes text for item 7.

RESOLVED:

To note the report.

8.1  Pradeep Waddon introduced the report, highlighting the following:

·  Investment balances stood at £125m at the end of March 2022;

·  There had been no change to borrowing in the previous 3 months;

·  The credit quality of investments remained A to A plus;

·  All investments were monitored to ensure that there was no direct investments in Russia or Belarus;

8.2  Councillor Smyth asked for clarification on the level of investment in Russia. 

8.3  Jackie Moylan told the Committee that this related to the Pensions Fund and that the investment level was 0.5 %.

8.4   The Chair referred to the impact of inflation on the Council and the financial markets.

8.5  Pradeep Waddon told the Committee that Officers were working with Financial Advisers to monitor the impact of the increase in inflation and interests rate on borrowing and investments.

RESOLVED:

·  To note the report.

RESOLVED:

To note the report and the attached Risk Register.

8.1  The Group Director, Children and Families introduced the report   highlighting the following:

  Children’s Services

·  A new risk related to Child Q. Revision of the partnership relationship largely through the Children’s partnership. Work to ensuring that all agencies with children have a safeguarding first agenda;

·  Cyber-attack had an impact on Children’s services;

·  On 4 April there had been a return to the Mosaic system. Recording now complied with statutory requirements.

·  A move to a front door approach to help children at an earlier stage;

·  High cost of placements in Children’s homes;

·  High financial pressures

Education:

·  Green Paper – Special Educational Need and Disabilities – large financial pressure and a number of strategies had been developed;

·  There had been a restructure of the service to ensure improved outcomes for children and a better use of resources;

·  Improvement plan for service provision. There had been an improvement in assessing children who require education and care plans;

·  A strategy was in place in relation to unregistered educational settings;

·  Falling numbers in reception;

·  High financial pressures

9.1  The Chair expressed concerns at the pressures in relation to the

Council’s ability to maintain standards in service provisions in particular around SEND provision and EHCF. He expressed concern that incoming resources did not match need and the associated long term implications in a variety of settings.  He considered that the Audit Committee would want to receive updates on these matters.

9.2  The Group Director for Children and Education told the Committee that the service’s ambition was to provide support at an earlier stage and making optimal use of schools to ensure that children get the help that they need rather than relying on private providers and non-maintained independent sector. It was confirmed that this was a national pressure. A SEND strategy was in place.  

9.3  Councillor Gordon was encouraged to hear of the SEND Strategy and steps taken, referring to the ongoing crisis in SEND provision. She stressed that parents need to be reassured that they are in receipt of the full range of opportunities for their children. Councillor Gordon referred to the fact that school exclusions was the subject of a Scrutiny Panel report and was a risk for the individuals including around reputational damage.

9.4  The Group Director for Children and Education told the Committee that the current system of EHCP seem to set the local parents in opposition to the Local Authority in seeking help and the aim was to take the matter forward with compassion for children and parents and that children could access the curriculum in a way that assisted children in accessing the curriculum, maximising their opportunities. The recent Government Green paper focused on a number of current issues in education A comprehensive action plan had been produced in respect of school exclusions with the Anti-Rascism plan focusing on outcomes for the Boroughs black and mixed heritage boys, over represented in school exclusions with a level of influence rather than direction looking at creative ways of including the child’s  ...  view the full minutes text for item 9.

9.1  The Group Director, Adults, Health and Integration introduced the report,   highlighting the following:

·  Resources was the single biggest risk in Adult Social Care, compounded by cost of living pressures, particularly on the Council’s provider market;

·  Difficulties in attracting and retaining staff; 

·  Increase in energy costs;

·  The introduction of reforms in the Social Care Sector;

·  There is not a sustainable settlement for Adult Social Care;

·  Work ongoing on modelling in relation to resources and costs;

·  The ability to respond to the Cyber-attack had improved significantly;

·  Mosaic will be re-implemented in 2022;

9.2  Councillor Smyth asked for an update on COVID-19 vaccinations in the Borough.

9.3  The Group Director, Adults, Public Health and Integration highlighted the following:

·  That vaccination in the Social Care Workforce was mandatory with good vaccination rates;

·  Since the mandatory requirement was lifted there were concerns that individuals were less inclined to have boosters;

·  Vaccinations in the wider population was not high leaving vulnerable people at greater risk of hospitalisation;

·  Much work as ongoing on targeting at present;

9.4  Councillor Lynch clarified that safeguarding also applied to adults.  She

referred to the difficulties in recruiting and retaining staff and asked what measures could be put in place to improve this within the existing workforce and mitigating risk together with considering different ways of providing care.

9.5  The Group Director for Adults, Public Health and Integration highlighted the following:

·  Workforce was priority with the post of Assistant Director appointed to manage this area;

·  There was a need to develop career pathways to offer proper career pathways and career opportunities that span both the NHS and Social Care;

·  The Council was considering ways to attract young hackney people to social care posts;

·  The Council was co-designing a Skills Academy with set pathways to attract and retain;

·  The Council would offer Occupational Therapist qualification when online;

9.6  The Chair considered that both risk reports raised concerns with services

  under pressure while resources were inadequate.

RESOLVED:

To note the report and the attached Risk Registers and controls in place.

10.1  The Corporate Head of Audit and Anti-Fraud introduced the report asking the Committee to consider and approve the proposed Annual Audit Plan and resource for 2022/23 as part of its role in overseeing corporate governance. He highlighted the following:

·  The Pandemic and the Cyber-attack had impacted on the assurance work that could be carried out during that time;

·  There has been strong engagement from all of the service areas in drawing up the plan, an indicator of a return to more normal working;

·  The includes areas that the Committee has been interested over the last year, including the repairs backlog, the Net Zero targets and several audits around the ICT environment including a Need Assessment of ICT;

·  There was sufficient flexibility in the plan to allow for a change of priorities;

RESOLVED:

To approve the proposed Internal Audit Plan 20222/23 and key performance measures.

11.1  The Head of Audit and Anti-Fraud introduced the report on the performance of the Audit and Anti-Fraud Service, the areas of work undertaken, and information on current developments in Internal Audit and Anti-Fraud together with statistical information about the work of the investigations teams.

11.2  The Head of Audit and Anti-Fraud highlighted the following:

·  that the biggest challenge facing the service continued to be the impact of the Cyber-attack on the Council’s systems making it difficult to audit many areas that were in the previous Audit Plan over the past year;

·  22 Audits were deferred with 20 of these deferrals resulting from the Cyber-attack;

·  93 % of the Plan was in progress with audits being delivered;

·  This was the 2^nd year when a smaller number of audit reviews have been possible. Using the smaller number combined with assurance from previous years when a higher range of assurance work was possible the opinion had been formed that the overall system of internal control is providing adequate level of assurance for the Council;

·  There was grounds for optimism for the coming year because of good engagement from service areas;

·  The percentage of limited and low assurance reports is comfortably within the previous year’s levels but the inability to carry out an audit was a concern in itself;

·  The implementation of recommendations remains at a high level and within service indicators;

·  On investigations there were higher levels of referrals and outcomes from both the tenancy fraud work and the Blue Badge parking work. The number are lower than previously for No Recourse to Public Funds.

·  The quantifiable benefits from investigations will remain in an upward trend.  

11.3  The Chair asked for clarification that despite all the pressures over the previous 2 years on Internal Audit with movement of staff, the level of compliance remained high though out the Organisation. In the area of business grants there had been much evidence that there had been widespread fraud and he asked why this did not apply to Hackney.  

11.4  Michael Sheffield confirmed that the level of compliance had remained

high throughout the Organisation with the Caveat that this related to the audits that had been carried out. He confirmed in relation to business grants that pre-payment assessments had been carried out as well as post payment checks. Fraudulent applications had been received but these had been identified early.

11.5  Councillor Smyth asked for clarification on how the Fire Safety Risk

Assessments were carried out. Michael Sheffield confirmed that the Audit Section did not carry out inspections but advised on procedures and outcomes applied.

RESOLVED:

To note the progress and performance of the Audit and Anti-Fraud Service to 31 March 2022. 

12.1  Michael Sheffield introduced the report summarising the Council’s corporate arrangements for whistleblowing and provided an update of the cases received in 2021/22. Whistleblowing continued to be a small but important work referred to the Audit Team to follow up on. Some Whistle-blowers come through an independent hot line and those who reported directly to a Council. The same protection applied to both avenues. The levels of whistleblowing were similar to those reported in previous years.  

RESOLVED:

To note the report.

13.1  The Head of Audit and Audi-Fraud introduced the report presenting the revised Whistleblowing Policy for review and approval. The Policy set out the process under which staff and others can raise whistleblowing concerns and how they will be dealt with. The Policy contained minor updates with linkages to other Hackney policies with a change procedure attached.

  RESOLVED:

·  To approve the revised Whistleblowing Policy dated 1 April 2022 as set out at appendix 1 to the report.

RESOLVED:

To note the report.

14.1  The Chair introduced the report detailing the role of the Audit Committee and summarising the key activities and achievements in 2021/22 that demonstrate how the Committee had fulfilled the role effectively and to measure consistency with the guidance issued by the Public Sector Internal Audit Standards and other statutory requirements.

14.2  The Chair told the Committee that the report followed up on the recommendation to follow up and build on the initiatives that had been taken, particularly around performance reporting, oversight of the budget, the oversight of the Cyber-attack, external audit. He considered that all these required to be pursued in the new administration. All departments required to be involved in Climate change. There was a need to review the way that the Council assessed risk.  

RESOLVED:

To note the report.

RESOLVED:

To note the report.

15.1  Deirdre Worrell introduced the report on the Net Zero Deep Dive Review, highlighting the following:

·  The review was carried out to provide assurance around the internal arrangements in relation to Net Zero;

·  The report covered the development of the thematic action plans and how these are linked to the delivery of targets, considering the impact of future action;

·  The Management arrangements were found to be robust.

·  The importance of consultation and engagement with the community was emphasised;

·  There were significant financial challenges in the implementation of action plans;

·  4 recommendations flowed from the conclusions;

·  The importance of engagement of all Council Departments was emphasised;

15.2  The Chair highlighted the following:

·  The need to build in the thematic action plan with a financial model in place;

·  There was reassurance around management arrangements with much on work in bringing initiatives together. There was a need for other departments to play a part:

·  The Executive would need to take a stronger oversight role to ensure cooperation;

·  The responsible Executive member must have sufficient authority to ensure joint working;

·  The importance of community involvement and engagement;

·  The current gap in finances needed to be addressed with a credible route to funding;  

·  The report should be sent to the Chief Executive and the incoming Mayor;

Action: Deirdre Worrell

16.3  Councillor Smyth referred to the EPC level C and need for the action plans to cover individual properties and block. He referred to a Civil Service report on the criteria to use in a retrofit.

10.4  Deirdre Worrell told the Committee that Housing Services was currently developing a pilot scheme that represents a typology of over 50% of housing stock and no decision had been taken in relation to the EPC level.

RESOLVED:

To note the report.

RESOLVED:

To note the report

RESOLVED:

To note the report

18.1  There was no other non-confidential business.