Agenda and minutes

Audit and Governance Committee
Thursday, 26th July, 2018 7.30 pm

Venue: Civic Offices - St Nicholas Way, Sutton, SM1 1EA. View directions

Contact: Fiona Bywaters, Committee Services Team Leader  Tel.: 020 8770 4990, Email:

Link: Audio Recording

No. Item


Welcome and Introductions


Councillor Richard Clifton welcomed those present to the first meeting of the Audit and Governance Committee. Particular introduction was given to the Independent Persons.


Apologies for Absence


Apologies for absence were received from Councillor Marlene Heron, for whom Councillor Jenny Batt was substituting, and Councillor Martina Allen, for whom Councillor Param Nandha was substituting.


Apologies for absence were also received from one of the Independent Persons, Geoffrey Beresford Hartwell.


Declarations of Interest


9. AG/2018/05 - Statement of Accounts 2017/18 and External Audit Findings.

Councillor Joyce Melican, Non Pecuniary, Board Member of Sutton Housing Partnership.



AG/2018/01 - Operation of the Code of Conduct pdf icon PDF 89 KB

A function of the Council’s Audit & Governance Committee is to receive reports on the operation of the member Code of Conduct at Sutton. The purpose of this report is to update the committee on complaints which have been received and dealt with since the last meeting.


Jessica Crowe, Monitoring Officer, presented the report.


Following the presentation, Councillor Nick Mattey expressed his view that there ought to exist a mechanism by which Members can express complaints regarding officers. The Monitoring Officer responded that members were within their right to critique, but that there were limits as to how robust that could be as officers had not stood for election or sought public office in that regard.


Members were reminded of the longstanding tradition in public service that officers should not be criticised in public and that a number of alternative routes existed for complaint if required.



1.    The action taken by the Monitoring Officer in dealing with complaints was noted.

2.    No further recommendations were made relevant to the committee’s role and function in promoting high standards of ethical conduct by members.


AG/2018/02 - Member Development Update pdf icon PDF 153 KB

The purpose of this report is to update the Committee on the Council's member development programme, setting out how the Council is ensuring that all members are fully aware of their obligation to follow the Nolan Principles and to help them meet the standards of behaviour and conduct that the public have a right to expect from their elected members.

Additional documents:


Fiona Bywaters, Committee Services Team Leader, presented the report.

Following the presentation, Councillor Richard Clifton thanked officers for the thought put into the induction programme of 2018. The Chair then invited newly-elected members in particular to give their views:


·         Councillor Param Nandha enquired if all Councillors were able to attend planning committee member development and this was confirmed. Members suggested a refresher training later in the year, available to Ward Councillors, be arranged.


·         Councillor McDermott-Hill stated that the weekly bulletin was certainly appreciated but that the high volume of emails received by Councillors may mean it is missed.


·         Councillor Jenny Batt gave positive feedback with regard to the Freshers’ Fayre and thanked officers for the organisation of the programme.


The Chair also spoke on the subject of the bulletin, highlighting the usefulness of the link to new planning applications. Vice Chair, Councillor David Hicks, expressed a wish that the bulletin remain at a weekly frequency but that its urgency may need highlighting in a more visible manner.


The Monitoring Officer asked Members whether the Friday afternoon timing of the bulletin was appropriate and following feedback, the Committee Services Team Leader suggested that sending the bulletin on a morning be trialled and Members agreed.


RESOLVED: that the member development update was noted and recommendations made with regards to promoting members’ obligations to uphold the Nolan Principles and wider standards of behaviour.


Member Development

Topic: Statement of Accounts.


Philip Crow, Interim Head of LBS Financial Strategy and Reporting, presented a member development session on the subject of the 2017/18 Statement of Accounts.


Councillor Nick Mattey requested whether there could be a summary version circulated in future, as is practice at some other authorities.


AG/2018/03 - Annual Insurance Review pdf icon PDF 97 KB

The report provides assurance that the insurance service is operating efficiently and effectively as part of the overall risk management framework of the Council as well as acting on a commercial basis providing services to other local authorities and generating new income.

Additional documents:


Bradley Peyton presented the report in closed session, following a motion to exclude the press and public (none of whom were present).


RESOLVED: that the review was considered and that the efficient and effective operation of the insurance service be noted.


AG/2018/04 - Treasury Management Annual Report pdf icon PDF 127 KB

The Local Government Act 2003 require the Council to produce an annual treasury management report reviewing treasury management activities and the actual Prudential and Treasury Indicators for 2017/18. This report meets the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).


The Council invested surplus funds when available and complied with the requirements of the Prudential Code. The Council has operated the agreed Treasury Management Strategy for 2017/18.

Additional documents:


Lyndsey Gamble, Head of Investment, Risk and Commercial Finance, presented the report. Following member enquiry, particular explanation was given to the cash balance strategy (versus longterm borrowing).


Following a question on investment property purchases from Councillor Nick Mattey, the Head of Investment, Risk and Commercial Finance explained the modelling involved which covered a range of scenarios. The Councillor further enquired about investment in land in Belmont and Gerald Almeroth, Strategic Director, explained the borrowing strategy and the minimisation of revenue costs. Councillor Param Nandha enquired if other such investment was foreseen at present to which it was responded that this was a separate consideration to treasury management and sources of borrowing were explained. Chair and Vice Chair respectively, drew attention to Heritable Bank (Paragraph 4.34-5) in the report and the maintenance of surplus funds (Paragraph 4.20)



1.    The treasury management activity undertaken during 2017/18 be noted.

2.    The Council performing within the Prudential Indicator limits set for 2017/18 be noted.

3.    This report be approved as the Treasury Management Annual Report 2017/18 and recommended for adoption by Full Council.


AG/2018/05 - Statement of Accounts 2017/18 and External Audit Findings pdf icon PDF 127 KB

This report sets out the responsibilities of this Committee in relation to signing off the Statement of Accounts and any matters raised by the External Auditors on the 2017/18 Statement of Accounts.


Additional documents:


Philip Crow, Interim Head of LBS Financial Strategy and Reporting, introduced the report as presented by the external auditors, Grant Thornton. Attention was drawn to paragraph 4.9: that there were no material errors in the accounts. Thanks were given by the external auditors for officer efficiency and cooperation across the Council, to which the Vice Chair, Councillor David Hicks expressed his concurrence.


Points of clarification were raised on the receipt of benefits and the timing of the accounts of Sutton Housing Partnership, to which further explanation was provided.


Councillor Colin Stears referred to the low reserves mentioned and whether there was a risk associated in comparison to other boroughs. The external auditors referred to the reserves policy and expressed a similarity in range to other boroughs in southwest London.


Councillor Nick Mattey enquired as to the impact of a high court case on the Council with regards to Sutton Housing Partnership and which related to water and sewerage charges (p.76 of the supplementary agenda pack). The external auditors explained that there was a £1.2million provision made in the Council’s account. Councillor Joyce Melican provided further context and explained that this had been taken up by London Councils.



1.    Grant Thornton’s Audit findings report on the 2017/18 main Sutton Accounts Audit be noted, as well as the comments made and the unqualified opinion given (Appendix D).

2.    Grant Thornton’s Audit findings report on the 2017/18 Pension Fund Audit be noted, as well as the comments made and the unqualified opinion given (Appendix E).

3.    The two Letters of Representation to the Auditors be agreed (Appendices A and B).

4.    The final 2017/18 Statement of Accounts as amended be approved including the Council’s Annual Governance Statement (Appendix C).

5.    The unqualified Value for Money conclusion included in the Audit Findings Report (Appendix D) be noted.


AG/2018/06 - Annual Review of Corporate Governance and Annual governance Statement 2017/18 pdf icon PDF 119 KB

This report presents and explains the Annual Review of Corporate Governance, undertaken using the CIPFA/SOLACE standards and the Council’s 2017/18 Annual Governance Statement.

Additional documents:


Margaret Culleton, Head of Audit, presented the report.


Councillor Colin Stears enquired as to what was meant in this context by ‘partnership’, and the Head of Audit responded that this referred to for example, work on shared services and governance arrangements of the council companies. The Councillor further highlighted the links of Internal Audit to the work of the Scrutiny Committee which the Vice Chair agreed to be complementary with that of the Audit and Governance Committee.


Councillor Joyce Melican enquired as to whether outcome-based commissioning would have an impact, and the Head of Audit responded that this would be kept under consideration.


RESOLVED: that the 2017/18 Annual Governance Statement (Appendix A), prior to it being certified by the Chief Executive and Leader for inclusion within the Council’s Statement of Accounts, was considered and endorsed.


AG/2018/07 - Review of Corporate Risk Management pdf icon PDF 124 KB

This report sets out the annual review of the Council’s risk management strategy and guidance. The report also shows the current corporate risk register which was updated in March 2018.

Additional documents:


Jessica Crowe, Assistant Director - Customers, Commissioning and Governance - presented the report.


Councillor Nick Mattey enquired whether all Councillors should be consulted before any decision is made on the report. The Assistant Director referred to recommendation 2.3 to draw Members’ attention to risk management.


Councillor Colin Stears drew attention to the responsibilities of Councillors and the impact on consideration of decisions at committee. The Councillor suggested that greater consideration to risk be given in policy reports, e.g. with the risk register grading diagram, to aid members in their responsibility. Councillor James McDermott-Hill suggested that committee might benefit from the contributions of other members (of policy committees) at their meetings when relevant subjects were raised. The Assistant Director committed to look at this feedback from members.


Councillor David Hicks requested that ‘sensible and concise advice’ on risk management be given by the council as to how it ensures that neither the council nor public are put at risk by judgments within the decision-making process.



1.    The updated risk management strategy and guidance be agreed.

2.    The updated corporate risk register be noted and commented upon.

3.    It be endorsed that on an annual basis, the Risk Management Strategy and Guidance, statement and register, be circulated to all members with a short covering briefing to highlight the importance of understanding the council’s approach to risk.


AG/2018/08 - Internal Audit – Annual Report 2017/18 pdf icon PDF 123 KB

This report summarises the work undertaken by Internal Audit during 2017/18, including details of audit assurance opinions and counter-fraud/investigation work. It includes the Head of Internal Audit’s Annual Opinion on the Control Environment and the Annual Review of Effectiveness of Internal Audit.

Additional documents:


Margaret Culleton, Head of Audit, presented the report.


Councillor Param Nandha enquired as to the action plan in relation to temporary housing testing. Officers explained that there was not a formal action plan but part of the regular follow-up process and that further detail could be provided by email. Attention was also drawn to the mention of business support procurement card process and further explanation provided.


Councillor Nick Mattey made enquiry as to what was referred to under ‘corporate - external’ on the summary of the work of the South West London Fraud Partnership and the Head of Audit gave the example of fraudulent council tax reduction claims. The Head of Audit explained that there would be an item at the next committee on fraud.


Members gave further examination to the service specific audits for reviews given limited assurance (Paragraph 4.11) and officers explained that further follow-up would be given at a future meeting. In particular, Councillor Jenny Batt highlighted the limited assurance on DBS checks and the officers explained that satisfactory controls are now in place.


Members asked whether the terminology in the table under paragraph 5.2 of the report could be amended or additional explanation given in future.



1.    The Annual Report (Appendix A) be noted.

2.    The Head of Internal Audit’s Opinion on the Council’s internal control environment and the Annual Review of Effectiveness of Internal Audit be endorsed.

3.    It be noted that internal Audit has confirmed compliance with the Public Sector Audit Standards during 2017/18.


AG/2018/09 - Annual report of the Audit Committee 2017/18 pdf icon PDF 113 KB

This report presents a draft Annual Report of the Audit and Governance Committee for 2017/18 for consideration. The purpose of this Annual Report is to demonstrate to stakeholders the work undertaken by the Audit Committee over the previous 12 months in promoting good governance and fulfilling its terms of reference.

Additional documents:


Margaret Culleton, Head of Audit, presented the report.


Councillor Richard Clifton expressed his belief that this report should refer to the committee as the Audit Committee in the context of 2017/18. He further suggested that photos of the Councillors be removed and that the introduction be written by the Chair of the committee in 2017/18.


It was highlighted that the biannual obligations of the committee ought to be included in Appendix C (in reference to health and safety and employment trends).


A spelling error was also pointed out with regards to Councillor Melican’s surname.



1.    The content of the Annual report be finalised.

2.    The Annual Report be made available / distributed to stakeholders.