Agenda and minutes

Audit and Governance Committee
Thursday, 18th October, 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


The Chair welcomed all those present.


Apologies for Absence


Apologies for absence were received from Councillor Melican for whom Councillor Galligan was substituting and Councillor Patel for whom Councillor Gonzalez was present as a substitute.


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



Declarations of Interest


There were no declaration of interests.


Minutes of the Previous Meeting pdf icon PDF 91 KB

To approve as a correct record the minutes of the meetings held on 26 July 2018.


The Minutes of the meeting held on 26 July 2018 were approved as a correct record, and signed by the Chair.


AG/2018/10 - 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 on the Code of Conduct.


Referring to two of the complaints (Paragraph 4.1), which were not investigated as they were deemed not to be in the public interest, the Chair enquired what criteria is used to determine this.


The Monitoring Officer responded that the criteria required in establishing whether a complaint is to be investigated fully are set out in Paragraph 3 of the report. A balance has to be struck considering the seriousness of the alleged offence and the complexity and cost of investigation. It is not in the public interest to mount full investigations if the offence is quite minor in nature.




  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/2018/11 - Member Development Update pdf icon PDF 230 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.


The Monitoring Officer introduced the report.


Following the suggestion at the previous meeting of the Audit and Governance committee to trial the distribution of the Members’ Information Bulletin from Friday afternoon to Monday morning, Councillor McDermott-Hill conveyed that he found the switchover beneficial.


Councillor Heron commented that corporate parenting training should be a mandatory requirement for members and could be useful to members in their role.


The Monitoring Officer noted that there was no power to make training mandatory, but the suggestion could be communicated to group leaders to encourage members to attend such training.


The Chair thanked officers for their effort in coordinating the member development programme.




  1. 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: Treasury Management


David Whelan, Managing Director, Link Asset Services presented a member development session on the subject of treasury management.


Following the presentation, Councillor Hicks enquired what the role of this committee ought to be in reviewing non treasury investments. Gerald Almeroth, Strategic Director of Resources, commented that an annual report of this type is presented before the Strategy and Resources Committee, which reviews all assets, generated income yield and risk understanding. With the new guidance, officers are shaping the reporting process, as these would now need to be included as investments within the treasury strategy.


On merging commercial and treasury management strategy, Councillor Stears raised concerns on whether this would hasten investments of commercial sensitivity into the public domain and questioned the scrutiny, audit and decision making process of the strategy.


Lyndsey Gamble, the Head of Investment, Risk and Commercial Finance commented that a capital strategy would need to be produced where they would be an opportunity to set broad principles of decision making and local indicators including affordability and sustainability.


Councillor Mattey enquired what mechanism the Council would employ to avoid high cash outflows with debt maturity scheduled in 2041 and whether members could undergo training to be abreast with recommendations. The Head of Investment, Risk and Commercial Finance replied that within the HRA business plan, the Council has set a plan to allocate funds to repay the loan upon maturity reducing interest rate risks. The Strategic Director expressed that officers were here to help provide further relevant member training.



AG/2018/12 - HR Update pdf icon PDF 250 KB

This report provides an overview of key HR and workforce related data, including an analysis of that data and overall direction of travel. An update is also provided on progress of the ‘People plan’ in relation to policy updates. Finally, an introduction to the work to refresh the ‘OD and People Strategy’ is provided including timescales and next steps.


Alison Hackett, Assistant Director, People and Organisational Development presented the report.


In response to the black and white printing of agenda papers, the Committee requested that the Council considers and implements a consistent system for replacing colour coding so that any problem is minimised. Committee members suggested adding the characters of "RAG" rating, or a numeric or alphabetic scale.


Members asked for numbers to be incorporated on the scorecard in future for the data to be more salient. Referring to the reduction in personnel noted in Paragraph 4.20, the Chair suggested that the fall in numbers was due to privatisation and the financial environment.


Councillor Hicks asked for comparative data on the sickness rate of council staff to exclude staff groups who are no longer employed by the Council. Councillor McDermott-HIll enquired if data could be provided on service staff employed, to which the Assistant Director replied that HR will have this data to provide.




  1. The report be noted.



AG/2018/13 - Treasury Management Quarterly Update pdf icon PDF 136 KB

This report is the treasury management review for the quarter ended 30 June 2018. It summarises the Council’s Treasury Management operations during the first three months of 2018/19. It is presented for the purpose of monitoring and review and meets best practice as suggested by the Treasury Management Code of Practice.

Additional documents:


The Head of Investment, Risk and Commercial Finance, presented the report.


Councillor Mattey questioned whether there were any penalties in withdrawing deposit funds and the the Head of Investment Risk and Commercial Finance referred to Paragraph 4.7 to outline notice period for withdrawal.


Referring to temporary borrowing documented in Paragraph 4.5, Members enquired whether this referred to short-term borrowing investments and if there were circumstances in which this could be breached.


The Head of Investment Risk and Commercial Finance responded that this was a short term borrowing requirement. The £82.4m figure was the limit at any point during the year, peaking at £15 millionand this figure could be clarified for future reports. She added that the temporary borrowing limit is pivotal in forming one of the council’s prudential indicators acting as a framework to ensure the council has enough cash and was minimising temporary borrowing, thereby, reducing risk.


Councillor Stears questioned how the Council would be able to cope financial to fund a tragedy like Grenfell. The Strategic Director, Resources explained that Grenfell was an extraordinary disaster. The council would have to seek assistance from the government and as a taxing authority, the council could also borrow money from the Public Works Loan Board (PWLB).




  1. The treasury management activity undertaken during the first three months of the year be noted.



AG/2018/14 - Fraud Referrals and Investigations Update pdf icon PDF 194 KB

This report summarises the results of the Council’s Counter-Fraud and investigations work undertaken since 1 April 2018 compared with the indicative resource allocation plan for 2018/19.

Additional documents:



Kevin Holland, Head of South West London Fraud Partnership (SWLFP), introduced the report.


Councillor Crossby questioned the length of time taken from when a property is reported as fraudulent to when a case is with the judicial authorities. The Head of SWLFP expressed that this was difficult to confirm. In some cases it could take a matter of weeks; however, in certain cases where the council has to undergo lengthy legal proceedings which require issue notices and eviction orders, it can take a year or two years to secure possession.


Councillor Galligan enquired on the process in cases of tenancy fraud where someone has to vacate the property and is homeless. The Head of SWLFP explained that they work closely with the housing team in cases where someone is genuinely homeless to advise of their housing options.




  1.  The report be noted and commented.



AG/2018/15 - Internal Audit Progress Report pdf icon PDF 126 KB

This report summarises Internal Audit’s progress in delivering the Annual Audit Plan up to September 2018.

Additional documents:


Margaret Culleton, Head of Internal Audit, presented the Internal Audit’s 6 month Progress Report up to September 2018.


On the miscoding of payments, the Vice Chair, Councillor Hicks asked if this involved

a large amount of money.


The Head of Internal Audit explained that this was difficult to establish as money was being coded to several codes rather than one and the issue had now been rectified.




  1. The attached progress report was considered and commented.



AG/2018/16 - Annual Audit Letter 2017/18 pdf icon PDF 155 KB

The Annual Audit Letter for 2017/18 formally reports the outcome of the external audit of the Council’s financial statements for the year and the auditor’s opinion on the Council’s arrangements to secure value for money. The auditor gave an unqualified opinion on the financial statements, including the pension fund statements, and concluded that the Council had proper arrangements in all significant respects to ensure it delivered value for money in its use of resources.

Additional documents:


Iain Murray, Engagement Lead at Grant Thornton (External Auditor) introduced the report.


The Vice Chair enquired whether the audit closure process went well, and the Strategic Director responded that the process was successful with good collaboration between officers and the external auditor.


Regarding the increase in care for young people, Councillor Clifton noted the rising demand and pressures on the council.


Councillor Mattey asked what measures the external auditors’ employed to ensure no impropriety with the accounts. The Engagement Lead commented that a myriad of actions are implemented including utilising data analytics, identifying which officers can raise journals and corroborating the council’s banking arrangements with the respective banks to ensure a framework of thorough quality assurance.




  1. The external auditor’s unqualified opinion on the Council’s financial statements for the 2017/18 year and the auditor’s conclusion that the Council had proper arrangements in all significant respects to ensure it delivered value for money in its use of resources be noted.
  2. There were no further comments on the annual audit letter or matters arising  from it that should be brought to the attention of the Strategy and Resources Committee on 29 October 2018.



AG/2018/17 - Audit Progress Report and Sector Update pdf icon PDF 154 KB

The Audit Progress Report and Sector Update provides a report on progress of our external auditors (Grant Thornton), delivering their responsibilities.


The report also includes a summary of emerging national issues and developments that may be relevant to the London Borough of Sutton and a number of challenge questions in respect of the emerging issues.


Additional documents:


The report was considered as read.




  1. The external auditor’s report on progress in respect of delivering their responsibilities be noted.
  2. There were no further considerations to the challenge questions in respect of the emerging issues.



Provisional Work Plan pdf icon PDF 63 KB


The provisional work programme was noted by members with the Chair suggesting that the next HR Update report should include information on occupational health and safety.