Agenda and minutes

There were no apologies for absence made at the meeting.

There were no substitute members present at the meeting.

If you have a Disclosable Pecuniary Interest* in an item of business:

§  if it is not yet on the council’s register, you must declare both the existence and details of it at the start of the meeting or when it becomes apparent;

§  you may choose to declare a Disclosable Pecuniary Interest that is already in the register in the interests of openness and transparency. 

In both the above cases, you must leave the room without participating in discussion of the item.

If you have a personal interest in an item of business and you intend to speak or vote on the item you must declare both the existence and details of it at the start of the meeting or when it becomes apparent but you may participate in the discussion and vote on the item.

*(a) Employment, etc - Any employment, office, trade, profession or vocation carried on for profit or gain.

(b)   Sponsorship - Any payment or other financial benefit in respect of your expenses in carrying out duties as a member, or of your election; including from a trade union.

(c)   Contracts - Any current contract for goods, services or works, between you or your partner (or a body in which one of you has a beneficial interest) and the council.

(d)   Land - Any beneficial interest in land which is within the council’s area.

(e)   Licences- Any licence to occupy land in the council’s area for a month or longer.

(f)   Corporate tenancies - Any tenancy between the council and a body in which you or your partner have a beneficial interest.

 (g)   Securities - Any beneficial interest in securities of a body which has a place of business or land in the council’s area, if the total nominal value of the securities exceeds £25,000 or one hundredth of the total issued share capital of that body or of any one class of its issued share capital. 

This applies to all members present at the meeting.

There were no declarations of interest made at the meeting.

The minutes of the meeting held on 28 January 2025 were agreed by the committee and the Chair was authorised to sign them.

The committee received a verbal financial update from the Corporate Director of Resources. There had been little change since the last update provided at committee on the 28 January 2025. It was highlighted that due to a one-off source of income and unspent contingency, the council would be underspent at year end.

The Committee received the Statement of Accounts. The Chair thanked KPMG, who were the Council’s new auditors, for the quality, breadth and depth of the audit reports presented to the committee. It was explained that the audit was substantially complete, with some quality assurance review measures still to be undertaken, and with the council expected to receive an unqualified audit opinion on the main accounts and the Pension Fund. KPMG had also cleared three previous years objections. The Deputy Director of Finance explained the new auditors had been very thorough and offered healthy challenge, and there were a number of adjustments required, including an adjustment around the value of open market sales and the valuation of schools, and an amendment to the waste recycling centre accounts. KPMG highlighted some of the risks and recommendations identified in the report.

Committee members raised and discussed the following main points:

·         On the significant value for money risk and the housing special investigation, it was explained that detailed work had to be undertaken to understand how the issue was being resolved. It was clear the council were aware of the issues, were in discussions with the regulator and were updating their policy and procedures. The external auditors were therefore confident the arrangements during the financial year were adequate and it was not raised as a recommendation.

·         On penalty charge notices, it was explained there was an adjustment required that did not impact the general fund or the bottom line.

·         That the process of reviewing working papers to get comfortable with closing balances had not led to the identification of any specific risks.

·         That there were changes in how the council accounted for leases that would require work around the planning and risk assessment for the 2024-25 Audit and an understanding of the council’s arrangements for establishing leases.

·         On the general fund balance reserves, the external auditor said they were satisfied everything was fairly stated on the financial statements. There were comments on the reserve levels at B4 and the external auditor was not concerned with the reserve level. It was highlighted that it was important for the council to consider budget gaps in future years.

·          On the pension fund there were a small number of misstatements and misclassification and recommendations to address those. There was no issue with the valuation of the fund. It was expected a clean audit opinion would be provided. Both audits were expected to be a clean audit opinion and would be provided the following week.

RESOLVED:

a)    To approve the audited 2023/24 Statement of Accounts (Appendix 1).

b)    To delegate authority to the Section 151 Officer and Chair of the Audit and Risk Committee to sign/approve the audited Statement of Accounts on behalf of Islington Council once the audit opinions are provided by the external auditor.

c)    To approve the audited 2023/24 Annual Governance Statement (Appendix signed by the Leader of the Council and the Chief Executive.

The external auditors presented the External Audit Findings report for Islington Council. It was highlighted that when the audit opinion was issued a final version of the report was required to be published on the council’s website. No significant weaknesses had been identified in the council’s use of resources.

RESOLVED:

To note KPMG’s 2023/24 Audit Findings Report (ISA2601) for Islington Council and the action plan of recommendations (Appendix 1)

RESOLVED:

To note KPMG’s 2023/24 Audit Findings Reports (ISA2601) for Islington’s Pension Fund and the action plan of recommendations.

RESOLVED:

To note the 2023/24 Auditor’s Annual Audit Report covering value for money, including any improvement recommendations (Appendix 1)

The Chair informed the committee there was a proposal before them to demerge the shared internal audit service between the London Boroughs’ of Camden and Islington. The Director of Finance introduced the report. It was highlighted that the report included the opportunities of demerging, such as being able to increase focus on the increased risk profile that local authorities were experiencing and the benefit of having a dedicated Head of Internal Audit. It was proposed to be implemented from the 1 July 2025. There would be work necessary around recruitment to the role.

Members raised and discussed the following main points:

·         On the risk of not being able to recruit to the roles and what would be the interim arrangements if the positions remained vacant, it was explained the Audit Manager for Investigations, and the Audit Manager for Internal Audit could report to the Director of Finance in the Interim. The salary would be competitive, and Islington Council and its audit service had a good reputation that was attractive to applicants. The timeline was considered sufficient to recruit to and resource the posts. There was also potentially an option to temporarily extend the shared service arrangements.

·         The Committee were concerned about the efficacy of an additional chief officer post in the context of increased scrutiny of vacant posts due to a commitment in the upcoming budget of headcount savings across the organisation. It was explained that the council was operating in a heightened risk environment, that included budget stress, and evidence suggested cutting resources in finance or audit was the wrong decision. The new roles were seen as critical to the organisation. The directorate would also have to find more workforce efficiency savings to fund the proposal.

·         The committee considered the significant increase in chief officer posts and whether the council should be investing in frontline workers to improve service delivery. It was explained that the posts would be involved in detailed and impactful work, and they had considered increasing the mid-tier roles but there would be a bottleneck if the heads of service were on a 0.5 contract.  

·         A committee member asked about the impact on the Internal Audit Plan, it was explained a new Audit Manager had been recruited and until they were in post there were acting up arrangements in place with oversight from the Head of Internal Audit.

·         A committee member asked about the extra cost to the council and whether Camden was equally impacted. It was explained there would be extra cost, but it was considered value for money. There were a multitude of benefits to the organisation, such as having a stronger focus on fraud prevention and detection. The benefits were not directly cashable but a closer look at how to evidence returns to the organisation could be carried out.

·         A committee member asked whether any issues with the current arrangements had been identified. It was explained the proposals were about strengthening and improving the current provisions.

·         A committee member asked whether the proposals  ...  view the full minutes text for item 186.

The committee considered its forward plan and the deep dive topics for 2025-26. 

The committee raised and discussed the following main points:

·         As a deep dive, the committee asked to look at demographic data and drivers, and population projections over the last three years, in order to understand falling rolls in schools.

·         The committee asked for information to be circulated on the risk of school closures to the council’s budget.

·         As a deep dive the committee asked to look at issues with recycling rates.

·         The committee requested that an illustration of parking income estimates be provided.

·         As a deep dive, the committee asked to review whether an indemnification or insurance framework was in place to protect councillors from civil liability complaints when they were involved in appointments, appeals or dismissals.