The Audit and Governance Committee of Waltham Forest Council met on Thursday 19 January 2012, noting the external auditor's annual audit letter for 2010/11 and receiving an update on the work of the Audit, Fraud and Risk Division. The committee also discussed a draft policy for criminal records checks for councillors, which it recommended for approval by full Council.

External Auditor's Annual Audit Letter 2010/11

The committee received the Annual Audit Letter from the External Auditor, which summarised the findings from their 2010/11 work. This included an assessment of the council's financial statements and its arrangements for achieving value for money. Jon Hayes from the Audit Commission highlighted key areas and confirmed that a report on grant claims would be presented at the next meeting. Councillor Naheed Asghar raised questions about draft financial statements and the capacity of finance officers to meet reporting responsibilities, to which the Director of Finance responded that processes were improving following the introduction of IFRS. Councillor Mark Rusling sought clarification on weaknesses in system controls due to separation of duties, and Bernadette Taylor from the Audit Commission explained that in some service areas, there had been no independent check, but acknowledged the council's pragmatic approach to resource allocation. The committee noted the report.

Audit, Fraud and Risk Division - Update Progress Report

An update was provided on the work of the Audit, Fraud and Risk Division between April and December 2011. Internal Audit was on track to complete its planned audits, with 77% of the programme in progress or completed to draft report stage. The Counter Fraud Group had secured 25 sanctions for benefit fraud, identified over £319,000 in fraudulent housing and Council Tax benefit overpayments, and £78,000 in overpaid DWP national benefits. They had also been instrumental in recovering 30 illegally sublet social housing properties.

Councillor Peter Herrington questioned the target of 80 sanctions, which the Assistant Director of Finance (Audit, Fraud and Risk) explained was based on past performance and aimed for a reasonable mix. Councillor Rusling requested that schools referred to in the internal audit reports be named. While the Director of Finance initially expressed concerns about potential confusion and damage to vulnerable schools, the committee felt that transparency was needed. The Head of Legal and Democratic Services confirmed that such internal audits should be public unless there were grounds for confidentiality. Councillor Rusling reiterated his request for school names to be included in future reports.

Councillor Asghar enquired about Section 106 agreements, and was informed that a follow-up review would be completed by the end of March 2012, with strengthened systems to ensure monitoring and timely use of funds. The Chair suggested wider advertising of the council's monitoring of single person discounts for Council Tax and the recovery of social housing properties to act as a deterrent and inform the public. The Assistant Director of Finance (Audit, Fraud and Risk) agreed to discuss this with Corporate Communications. Councillor Herrington noted a positive working relationship with Registered Social Landlords (RSLs), including Ascham Homes. The committee noted the report.

Criminal Records Checks for Councillors - Policy and Protocol

A draft policy for criminal records checks for councillors was proposed for recommendation to full Council. The policy aims to ensure a consistent and proportionate approach to checks, protect councillors' privacy, and support the council's safeguarding duties. Gerry Kemble, Business Partner for Children and Young People, explained that councillors undertaking regulated activities would require enhanced CRB checks, and it was proposed that all other councillors also undergo these checks to provide reassurance when dealing with vulnerable individuals.

Clarification was sought on whether this duplicated CRB checks undertaken by councillors who were school governors. The Head of Legal and Democratic Services advised that if existing school checks were current and valid, further checks might not be necessary. Councillor Herrington enquired about the inclusion of List 99 checks, which the Business Partner explained was a basic check related to the sex offenders register. Councillor Rusling noted that all candidates at the last election had been offered checks, and the Business Partner agreed to verify this. The Head of Legal and Democratic Services added that while there was no obligation for all candidates to undertake a CRB check, efforts would be made to facilitate this in the future. The committee recommended that full Council approve the policy and delegate authority to the Head of Legal & Democratic Services for the receipt and consideration of CRB disclosures.

Risk Management Update

The committee received a summary of risks on the risk registers for the Children and Young People and the Environment and Regeneration Directorates, along with an update on the implementation of risk management. All directorates had updated their risk registers, enabling effective monitoring. A training session for Members on risk management was agreed to be held before the next committee meeting on 22 March 2012. The Corporate Risk Register was being revised and would be presented in March.

The Assistant Director of Finance (Environment, Regeneration, Housing and Strategic Directorates) reported that the Environment and Regeneration directorate had 54 risks, a reduction from the previous quarter. Councillor Rusling questioned the scientific approach to assessing the likelihood of risks, and it was explained that managers and officers made assessments which were then discussed at management teams and the Corporate Risk Group.

Regarding the Children and Young People Services directorate, the Assistant Director of Finance (Children and Young People Services) noted that most risks were generic or related to issues such as Serious Case Reviews. The Chair expressed concern that the risk of death of children was scored as probable, and the Assistant Director agreed to relay this concern. Councillor Rusling noted that most risks in this directorate were shown as high, and it was advised that these would smooth out over time, as people-based risks can inherently be high. The Assistant Director would take the committee's concerns about necessary controls back to the directorate.

Councillor Herrington raised concerns about increased resources and safeguarding responsibilities during the Olympics, and the risk of increased street begging. The Assistant Director of Families Group Finance explained that the Olympic risks related to staff mobility and were being shared across boroughs. The Director of Finance confirmed that the risk of increased street begging was being considered. Councillor Michael Lewis expressed concern about the insufficient number of social workers, which the Assistant Director, Families Group Finance stated was being addressed. The committee noted the report and reviewed the risk registers for Children & Young People Services and Environment & Regeneration, agreeing to the training session.

Procurement Governance and Effectiveness

The committee received an overview of progress on procurement matters, following recommendations from the Independent Panel and the Procurement Scrutiny Panel. The Procurement Scrutiny Panel had recommended that the Audit and Governance Committee ensure the council demonstrates effective procurement governance and practice. The Assistant Director, Procurement highlighted that training had been rolled out to 400 staff in 2009, and this was being refined in collaboration with the London Borough of Enfield to offer a more modular approach.

Councillor Herrington expressed concern about the impact on local businesses and the collaboration with Enfield. The Assistant Director, Procurement and Commissioning explained that procurement regulations must be followed, but the sustainable procurement policy, approved in November 2011, included provisions to improve opportunities for local businesses. The collaboration with Enfield would pool expertise. Councillor Lewis raised concerns that some staff might not be aware of procurement processes, and the Assistant Director confirmed that follow-up work, including training, was ongoing. The Chair enquired about compliance enforcement within schools, and was informed of a quarterly forum organised by the Schools Improvement Service to provide guidance. The committee requested two follow-up reports on the monitoring and sustainability of Procurement Governance and Effectiveness, and on key objectives.

Contract Waiver Monitoring

The report detailed the number of contract waivers approved, with 8 approved in the current quarter compared to 11 in the previous quarter, indicating a downward trend. Environment and Regeneration had the highest number of waivers, though this had also declined. Internal Audit had found a high level of compliance with Contract Procedure Rules in a limited sample. The committee noted the report.

Changes to Contract Procedure Rules

Proposed changes to the Council's Contract Procedure Rules, part 8 of the Council's Constitution, were introduced to ensure a robust and fair process. The committee noted that changes had been made recently and requested a report in six months' time on their implementation. The committee recommended the changes to full Council and requested a monitoring report on their implementation.