This meeting was scheduled to receive a verbal update from BDO on the Value For Money Audit for the financial years 2020/21, 2021/22, and 2022/23. The meeting was also scheduled to review and note several reports on the progress of audits conducted by Mazars during the previous year, covering Housing Services, Internal Audit, and Anti-Fraud and Corruption.

It's important to note that this information is taken from the reports pack that was provided to the attendees of the meeting. It does not tell us anything about what was actually discussed at the meeting, or whether any decisions were actually made.

Housing Services Update

This item was scheduled to provide an update on the progress made by Housing Services on implementing recommendations made by Mazars in three recent audits. The three audits covered:

• Right to Buy
• Tenancy Management
• Damp and Mould.

The report states that as the audits are quite recent, and a number of recommendations are complex and have completion dates set some way in the future, as expected, progress to date is relatively limited in some areas.

Right to Buy

Mazars made three recommendations in this audit, one of which was classed as Fundamental. This related to delays in issuing Section 125 statutory notices to applicants for the Right to Buy scheme. The report states that The backlog position has improved, and external valuers have been procured that the Homeownership Team can instruct if unable to produce valuations internally in the future.

Tenancy Management

Mazars made seven recommendations in this audit, five of which were Significant. These were all about tenancy audits:

• Completing tenancy audits
• Triaging fraud related audits for completion
• Providing formal training/support on the completion of tenancy audits and the identification of fraud
• Updating the Tenancy Management Policy, which is outdated and lack key procedures .

Damp and Mould

Mazars made nine recommendations in this audit, three of which were Fundamental. The most significant were:

• Using the Granicus IT System to record all damp and mould cases from February 2024.
• Completing root cause analysis of damp and mould by the Housing Repairs team, including providing photographic evidence and, where possible, identifying the cause of the damp and mould.
• Recording all complaints about damp and mould on the Corporate Complaints system, which is due to be replaced by a new system that will better categorise these types of complaints.

Internal Audit Progress Report Quarter 2

This item was scheduled to provide an update on the progress made by Mazars towards completing the approved Internal Audit Plan for 2024/25. The report pack included a report by Mazars detailing their progress on audits that have been started or completed. The report highlighted three audits in particular that had been assigned Limited assurance:

• Delivery of Savings
• Staff Performance
• New Operating Model - Procurement Act 2023.

Delivery of Savings

Mazars found that the Council had not identified the full extent of the savings required. Also, where savings had been identified, there was insufficient evidence of the risks associated with achieving those savings.

A RAG status is not assigned to all savings proposals on the MTFS Tracker¹ and actions to address the risk are missing for Red and Amber RAG statuses; and Savings Proformas (business cases) are not reviewed or updated periodically.

Staff Performance

Mazars found that there was no approved framework for managing staff performance, and that the MyConversations system was not being used to monitor staff performance.

Absence of a standardised or approved performance management framework; Lack of monitoring and reporting on the completion of MyConversations as the system functionality does not permit automated controls to monitor completion of the MyConversations and a manual oversight process has been deemed a strain on resources; and Clarity over the formality or otherwise of the MyConversations process.

New Operating Model - Procurement Act 2023

Mazars found that the Council had not yet implemented all of the requirements of the Procurement Act 2023, which is due to come into force in February 2025.

The authority had not established a formal training programme which identifies staff, and the level of training required for the Procurement Act 2023; A documented framework for understanding which procurement regime will best suit the requirements of the relevant services had not been established; The foundational elements of Council’ Contract Standing Orders need to be finalised; Risk assessment and management as part of procurement activities are an integral component of VfM², encouraging a balanced approach to risk allocation between the Council and suppliers. The audit noted that while the Council is making progress, the introduction of documents such as a Procurement Framework and Training Programme will equip officers to make optimal decisions.

Anti-Fraud and Corruption Progress Report Quarter 2

This report was scheduled to provide an update on the work of the Audit & Risk Service’s Anti-Fraud and Corruption Team. The report pack included a report detailing the team’s progress against their work plan for 2024/25.

The report states that the most significant increase in cases being investigated is where employees or agency workers have other full-time employment.

Many of these cases will never reach the evidential thresholds to be prosecuted, although in the worst cases this is a clear objective under our strategy, many cases will be dealt with as a contractual breach under the disciplinary process or by terminating the agency assignment, and therefore put pressure on HR and Audit resources.

The report also provided information on the team’s progress in recovering properties that had been occupied fraudulently and preventing fraudulent Right To Buy applications.

Quarterly Treasury Management Update Report

The report pack included a report updating the Audit Committee on the Council’s treasury management activities and performance during the first half of the 2024/25 financial year. The report detailed the Council’s borrowing and investment activities, and provided an update on the Council’s compliance with its Treasury Management Prudential Indicators. These indicators are designed to ensure that the Council is managing its treasury activities prudently and effectively. The report states that all of the Council’s treasury management activities had been undertaken in line with the approved Treasury Management Strategy, and that the Council was in compliance with all of its Treasury Management Prudential Indicators.

The report also included details of the Council's LOBO loans³. £50 million of these loans had call option dates during the period covered by the report, but none of the lenders exercised their options. The report states that:

The Council currently holds £50m in LOBO loans, with call dates within the next 12 months. The Council has been working with treasury management advisors Arlingclose to assess the likelihood of the loan options being exercised. If the option is exercised, the Council plans to repay the loan at no additional cost. If required, the Council will use available cash or borrow from other local authorities or the PWLB to repay the LOBO loans.