The Audit Committee of Havering Council met on Tuesday 23 January 2024 to discuss the Treasury Management Strategy Statement and the Internal Audit Progress Report. The committee considered and commented on the draft Treasury Management Strategy Statement for 2024/25, which outlines the council's borrowing and investment strategies, and noted the progress made by the Assurance Service in its internal audit and counter-fraud work.

Treasury Management Strategy Statement

The committee reviewed the draft Treasury Management Strategy Statement (TMSS) for 2024/25 and the Annual Investment Strategy (AIS). This strategy is a key component of the council's financial management framework, aligning with guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Government Act 2003. The TMSS details the council's borrowing and investment strategies, as well as prudential and treasury indicators.

Officers presented an analysis of economic forecasts, indicating a consensus that interest rates are trending downwards. Based on this outlook, the strategy proposes that long-term borrowing should be undertaken on shorter durations (2-5 years) and then refinanced at a later date when rates are expected to be lower. The council aims to maintain a prudent cash balance of £40 million to manage fluctuations in expenditure.

The Director of Resources and s151 Officer, Tony Piggott, assured the committee that the proposed treasury management strategy changes were prudent and provided further detail on the liability benchmark, which sets a minimum threshold for cash balances. The committee noted that the team provides weekly updates on lent money.

The committee considered and commented on the report, ultimately noting its contents. The draft TMSS and AIS will be presented to Cabinet on 7 February and Full Council on 28 February 2024 for approval, along with revised prudential and treasury indicators and operational and authorised borrowing limits.

Internal Audit Progress Report

The committee received an update on the work undertaken by the Assurance Service, which includes internal audit and counter-fraud activities, during the period from 1 October to 31 December 2023. This report supports the Head of Assurance's opinion on the council's internal control environment.

The report detailed the progress of the 2023/24 audit plan, which is aligned with the council's corporate objectives of People, Place, and Resources. Adjustments to the plan are made to address emerging risks. During the third quarter, 14 internal audit reports were finalised, and 2 draft reports were issued.

Key findings from internal audits included:

• Schools Catering Allergy Management: Received Reasonable Assurance with 8 recommendations.
• IT Transition Procurement: Received Limited Assurance with 3 recommendations. This report's appendix was exempt from public access due to business confidentiality.
• Langtons Infant School Audit: Received Reasonable Assurance with 2 recommendations.

The report also highlighted the work of the counter-fraud team, particularly in relation to housing fraud and right to buy applications. In the current financial year to date, 12 properties were recovered, and a notional saving of £504,000 was achieved. For Right to Buy applications, 3 were stopped, resulting in a notional saving of £383,820.

In response to a member's question, the committee received assurance that the CCTV contract is compliant. The committee noted the contents of the report.