The Governance Standards and Audit Committee of Merton Council met on Thursday 19 September 2024 to review the interim audit results for the 2023/24 financial year, discuss complaints against members, and consider reports on gifts and hospitality. The committee noted the progress of the audit, confirmed no significant weaknesses in the council's value for money arrangements, and reviewed the annual reports on gifts and hospitality for both councillors and officers.

Interim Audit Results Report 2023/24

The committee received an update on the interim audit results for the 2023/24 financial year from Elizabeth Jackson, the External Auditor from Ernst & Young (EY). She reported that the Value for Money (VFM) report had been completed with no identified weaknesses and no regulatory issues or breaches. However, it was confirmed that the 2022/23 accounts remain unaudited and are expected to be disclaimed, with this disclaimer likely to remain for at least three years. The audit work for the 2023/24 accounts is nearing completion, with a projected sign-off in December.

EY confirmed that the sale of CHAS Ltd, the council's former subsidiary, had been thoroughly reviewed as part of the VFM report. They were satisfied that all governance procedures were in place and properly supported, and that the accounting for the sale was complete with funds correctly allocated.

A specific point of discussion was an amount of £1.8 million that appeared to be owed by South London Waste Partnership (SLWP) but was not confirmed. Ongoing discussions with SLWP were underway, and until these were resolved, there was insufficient data to confirm the debt's existence.

Despite the challenges with unaudited accounts, the report indicated that the council had fulfilled its obligations. EY expects to meet reporting and sign-off deadlines and will provide a summary of the completed work in November. The committee resolved to note and comment on the report.

Complaints Against Members - Annual Update

John Scarborough, the Monitoring Officer, presented the annual update on complaints against members. He reported that no complaints had progressed to formal investigation or public hearing, with all six complaints processed since September 2023 being handled either informally through apologies or deemed not proportionate for investigation. Mr. Scarborough clarified that the standard for investigation is not the criminal standard of beyond reasonable doubt but rather beyond reasonable probabilities at a civil level, with investigations only proceeding if allegations are considered serious enough to justify the time and resources.

The committee was informed that there is currently no requirement for additional training for members, though this will be kept under review. Induction training for new councillors is planned following the 2026 election. It was noted that members involved in complaints had been cooperative, and the process had been constructive. The current system does not allow for sanctions such as disqualification or suspension, and the Monitoring Officer stated that the council did not require more powers in this regard. The committee resolved to note and comment on the report.

Recruitment of Independent Person

The Monitoring Officer also introduced the report on the recruitment of an Independent Person. The committee agreed to the process for appointing an Independent Person, which includes advertising the role on the council website and in local publications. An interview panel, comprising one councillor from each political group, will be appointed to interview candidates and recommend an appointment to the full Council. The current Independent Person's term ends in February 2025, and the recruitment process aims to have a new appointee in place by then. The committee noted the report.

Annual Gifts and Hospitality Reports

The committee received two reports on gifts and hospitality: one for members and one for officers.

Annual Gifts and Hospitality Report (Members including Independent/Co-opted) The Monitoring Officer reported that 22 councillors had made declarations on 44 occasions. The nature of the gifts and hospitality was consistent with what might be expected in the course of council business. A reminder was issued to members regarding their responsibility to complete declarations of gifts and hospitality, including reasons for acceptance, within 28 days of receipt. The committee noted the report.

Annual Gifts and Hospitality Report (Officers) This report detailed 15 entries on the officers' register of gifts and hospitality between October 2023 and July 2024. The majority of entries related to hospitality and match tickets for the Wimbledon Tennis Championships, accepted to understand commercial opportunities for Merton's parks and improve access to sport. Other entries included dinners, theatre tickets, and donations to the Mayor's charity. Managers were reminded to ensure officers are aware of their responsibilities under the Code of Conduct for Employees regarding declarations and to exercise extra care when accepting gifts or hospitality from contractors or those seeking planning permission. The committee noted the report.

Work Programme

The committee noted the Work Programme for the upcoming year, which includes regular updates on external and internal audits, financial reports, risk management, and complaints. Specific items for future meetings include the final accounts, fraud updates, and revisions to contract standing orders.