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Council meetings

Agenda and draft minutes

Venue: Civic Suite, Lewisham Town Hall, London SE6 4RU

Contact: Email: committee@lewisham.gov.uk 

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Items
No. Item

1.

Minutes pdf icon PDF 55 KB

Additional documents:

Minutes:

RESOLVED that the minutes of the meeting of the Audit and Risk Committee held on 11 September 2024 be confirmed as an accurate record.

 

2.

Declarations of Interest pdf icon PDF 82 KB

Minutes:

No interest was declared.

 

3.

External Audit Update pdf icon PDF 99 KB

Additional documents:

Minutes:

1.1           The Chief Accountant presented the External Audit Update report and provided a brief summary of the audit updates:

 

·        Substantially complete with the main audit, the pension fund audit and the VFM audit.

·        The planned deadline for publication at end November 2024 was not met, now planned to complete during December with sign-off by full Council on 22 January 2025.

·        There were a few areas to be completed; the team would be working closely with KPMG to complete those.

·        There were five recommendations outstanding from previous years; four of which had been completed or superseded and one was still open, progress had been made on this.

·        There were a number of new recommendations. Due to the timing of the reports, management had not had time to complete their responses to the recommendations. Responses would be formalised with KPMG and shared with the Committee before being presented to full Council in January 2025.

 

1.2           The KPMG representative (Partner) extended thanks to the Executive Director of Corporate Resources, Director of Finance and the Chief Accountant for their support and co-operation throughout the audit.

 

1.3           The KPMG representatives presented their three reports to Committee, namely the Year End report (financial statements audit), Value for Money Risk Assessment and Pension Fund update report, and noted the below key points:

 

·        There were areas that had significant audit risks where there could be a material misstatement in the accounts, as detailed on page 22 of the meeting papers.

·        On the balance sheet side, reviewed valuation of land and buildings and valuation of the pension obligations, with assumptions that fed into that work.

·        Considered management override of controls, in relation to postings that impact HRA, with particular focus on work around journals on looking at whether there was anything reducing expenditure from the HRA and increasing it in the general fund.

 

1.4           With reference to the Year End (financial statements audit) the Senior Audit Manager from KPMG highlighted the below key points:

 

Areas of testing and audit risks

 

·          First significant audit risk was the valuation of council dwellings; this was identified because of the large value of the council dwellings and because valuation was based on estimates and judgements.

·          A lot of work had been performed in this area to date, as well as looking at the key assumptions in the valuations.

·          A recommendation to circulate a paper to Council, maintaining formal record of discussions with management experts to evidence it had been done.

·          Throughout the testing there had been a few changes to the valuation of properties, some of which were identified by KPMG and some by the council, which included a £23.2m adjustment because of indexation movement between January and March 2024. This was identified by the management specialist and impacts the council dwellings valuation.

·          In work over PPE, a £7m adjustment was also identified where the floor areas used in the calculation of the valuation of one school was incorrect.

·          Work ongoing over the valuation of council dwellings but was substantially complete.

·          Second significant  ...  view the full minutes text for item 3.

4.

Internal Audit Update pdf icon PDF 134 KB

Additional documents:

Minutes:

1.1           The Head of Assurance presented the internal audit update report which provided an update on work undertaken to date in progressing the 2024/25 plan, including timing to bringing the plan to a conclusion.

 

1.2           The Head of Assurance informed Committee he would be leaving the council in the new year and plans were in place for his successor. The internal audit team are prepared for the implementation of the Global Internal Audit Standards which comes into force in April 2025, and also includes an Application Note from the UK Public Sector published by the Internal Audit Standards Board. The most significant change in respect of the Audit and Risk Committee is the requirement to revise the council’s internal audit charter.

 

1.3           The Head of Assurance advised the London Audit Group had secured some time with the Institute of Internal Audit’s Global Technical Lead to speak to London audit committee members about the new Standards; this will be a free webinar in late January. The Head of Assurance would circulate details of the webinar via the Committee Chair.

 

1.4           The Chair noted the Committee will be sad to see the Head of Assurance leave the council and wished him well for his next appointment.

 

1.5           The Chair thanked the Head of Assurance for the comprehensive report.

 

1.6           RESOLVED that the report be noted, and Committee approved the Internal Audit Charter.

 

5.

Corporate Risk Register Update December 2024 pdf icon PDF 127 KB

Additional documents:

Minutes:

1.1           The Head of Assurance presented the update report on the corporate risk register providing detail on the continued development of risk management in the council, and noted a new Risk Officer would be joining the council in January. The appendix to the report provided the detail on the individual risks recorded on the register.

 

1.2           The Committee asked questions and noted responses on the following matters:

 

·         At the last meeting there was discussion on the way risks were dealt with that had already occurred particularly items relating to housing stock and the HRA. Has additional thought been given to how the council can better represent matters on the risk register that had essentially become eventualities being dealt with on an ongoing basis rather than giving them high scores on the register?

 

o            The Head of Assurance advised where some of the risks were increasing was partly because the issue being dealt with was growing graver and there may be an even graver future for the issue which drove it up the risk register. There is facility within the software to create an issues log which has not yet been explored but will be developed when there is extra capacity with the new Risk Officer joining the team.

 

·         With reference to the high risks particularly being unable to effectively improve housing stock, lack of resources, poor project management, what steps were being taken to address this?

 

o            The Head of Assurance noted that each risk has a risk owner who are the best people to speak on what and how the risk was being managed. The format of risk descriptions was typically a selection of trigger events which could make the risk worse, risk description and possible consequences were the risk to happen; poor project management, if experienced, could make the risk worse. Work was being carried out to produce guidance for officers and to enable this Committee to see how risks were being controlled to give assurance from a risk management perspective.

 

·        With reference to the risk on significant cyber security breach – was this because of internal factors or external factors? Also, the risk around workforce attraction and retention where the challenge has also increased; what were the factors around that?

 

o  The Head of Assurance advised, in relation to cyber security risks, the council (and other organisations) experienced thousands of attempted attacks every day by email and various other channels. The nature and extent and ingenuity of those attacks varied day by day. Work could be done to mitigate the impact of those risks by having good hygiene around backups, good recovery measures and business continuity approaches.

 

o  With reference to the workforce attraction and retention risk across the public sector, in the council there are areas that experience more recruitment challenges than others, particularly with specialist and professional roles. On staff morale a staff survey had recently completed which provided detail about how the council was perceived as an employer and what the retention risks were.  ...  view the full minutes text for item 5.