The Audit & Governance Committee of Croydon Council met on Thursday, 1 February 2024, to discuss a range of financial and governance matters. Key topics included updates on the Annual Governance Statement action plan, progress on the Dedicated Schools Grant deficit, and a deep dive into the risk register concerning sustainable parking services income. The committee also reviewed the Audit and Governance Committee Action Log and the Committee Work Programme.

Annual Governance Statement (Update on Action Plan 2022/23)

The committee received an update on the Annual Governance Statement (AGS) 2022/23 Action Plan, with significant progress noted in addressing the recommendations from the RIPI 2 report. Stephen Lawrence-Orumwense, Monitoring Officer, presented the updates, with detailed input from Huw Rhys-Lewis, Interim Director of Commercial Investment & Capital, Paul Golland, Interim Chief Digital Officer & Director of Resident Access, and Chris Dyson, Data Protection Manager.

Work is underway to embed completed actions into the council's daily practices, with internal audit set to test these completed actions to ensure their continued implementation. The committee noted the substantial scale of recommendations and actions within the AGS, acknowledging the ongoing work required to return the council to an acceptable level of monitoring.

Huw Rhys-Lewis highlighted that the improvement work undertaken had met the requirements of the RIPI 2 recommendations, and the focus was now on developing Procurement and Contract Management improvement plans, incorporating government best practice and anticipating changes under the new procurement act. These plans were expected to be finalised by March 2024. The committee heard that approximately 50% of the 460 identified contracts were deemed compliant, with ongoing improvements to increase this figure. A pragmatic approach is taken when resolving non-compliant contracts to avoid significant disruption.

Paul Golland provided an update on Information Management, noting significant progress following intervention by the Information Commissioners Office (ICO). Improvement plans have been developed, and resources allocated to clear the backlog of Freedom of Information (FOI) and Subject Access Requests (SARs). The council is now meeting its target of servicing 90% of requests within the required timescales, and the ICO's oversight is expected to conclude soon. Chris Dyson confirmed that only one FOI request from the backlog remained, with the current caseload of FOIs and SARs reducing. Training for staff is ongoing, with good uptake of mandatory online training. The committee raised concerns about recurrent Information Management performance issues and the timeliness of information publication, noting that while improvements have been made, further work is needed. The council is aiming to become a more paperless organisation and adopt new technologies for information management.

The committee resolved to consider and comment on the AGS 2022/23 Action Plan Update.

Dedicated Schools Grant (DSG) Deficit Management Plan

Shelley Davies, Director of Education, presented an update on the Dedicated Schools Grant (DSG) Deficit Management Plan. The committee inquired about the risk of not rectifying the deficit due to population growth and increased need. It was advised that the Safety Valve programme is supporting Croydon and other councils in reducing cumulative deficits while achieving a balanced in-year budget. The service has significantly reduced its overspend and is implementing strategic plans to reduce spend, including maximising in-borough provision.

The committee resolved to note:

• The key performance targets set under the DfE Safety Valve agreement.
• The overall performance of the Deficit Recovery Plan against targets, including challenges and risks of delivery.
• The impact on the accounting treatment of the DSG deficit, as provided for in relevant regulations.
• Challenges faced by the service with the implementation of the new Education system, Synergy, from Capita One.

Risk Register Entry 'Deep Dive' - Sustainable Parking Services Income

Malcolm Davies introduced the deep dive into risk register item PR0013, 'Sustainable Parking Services Income'. Jayne Rusbatch, Head of Highways and Parking, presented the findings. The committee queried the basis for downgrading the risk from red to amber, with officers explaining it was due to increased budget sustainability and certainty around ANPR camera income. Councillor Cummings noted that parking income had been a high-profile issue due to budget variances in 2022/23, but the position had improved, with 2023/24 performance aligning with the budget.

Clarification was sought on the £26 million expected income and the impact of recent Penalty Charge Notice (PCN) software issues. Nick Hibberd, Corporate Director of Sustainable Communities, Regeneration & Economic Recovery, advised that a printing problem had affected 3100 PCNs, leading to their cancellation and an estimated income loss of £56 per PCN. This incident will be reflected in future risk register updates. The challenges of balancing income generation from penalties with a customer-focused service were discussed, with officers explaining the need to balance objectives such as supporting the local economy with appropriate parking charges and school street safety objectives.

The committee resolved to note the contents of the risk presentation.

Audit and Governance Committee Action Log

Jane West, Section 151 Officer, provided a verbal update on the status of the 2019/20 accounts. These accounts were close to completion in December 2023 but were delayed due to an issue requiring incorporation and adjustments. The council was awaiting the external auditor's final position, with the accounts expected to be presented either at an additional meeting in February 2024 or by the latest at the 14 March 2024 meeting.

The cost implications and frustration surrounding the ongoing audit were noted. Councillor Jason Cummings, Cabinet Member for Finance, acknowledged the delays and reminded the committee of its ability to hold external auditors to account. The committee discussed the government's proposals for a backstop date for auditing local government accounts, which would impact Croydon's ability to complete its backlog. Discussions with the National Audit Office (NAO) were ongoing regarding the feasibility of completing accounts and the potential for dispensation. Funds to cover increased audit costs were held as a reserve. The council's intention to complete all outstanding years for a full record was reiterated.

Committee Work Programme and Assurance Mapping Document

Dave Phillips, Head of Internal Audit, noted the inclusion of reporting cycles in the assurance mapping document as requested by the committee. The committee discussed the potential inclusion of the People and Culture Transformation Programme and Transformation Strategy in the assurance mapping document, with plans to extend this to include the Exit Strategy Action Plan and Transformation Programmes once available. The committee suggested that the March meeting's update on the People and Culture Transformation Strategy could be a broader presentation on transformation as a whole. A discrepancy between the action log and work programme was raised, and officers agreed to review the documents. The committee also requested an update on gas safety compliance for the March meeting agenda.

Quarterly Whistleblowing Update

Stephen Lawrence-Orumwense introduced the report on whistleblowing disclosures. The committee welcomed the intention to increase awareness of the whistleblowing policy. It was noted that there had been greater staff uptake of the whistleblowing procedure over the past year, and comparison and benchmarking data would be included in future reports. The ongoing investigation mentioned in the report was slightly delayed due to its complexity, and timescales will be included in the next report. The committee discussed what constitutes success for whistleblowing, with upheld investigations leading to changes in practice indicating success. Officers agreed to include a paragraph on other related activities in the annual whistleblowing report.

Minutes of the Previous Meeting

The minutes of the meeting held on 30 November 2023 were approved as an accurate record.