Agenda and draft minutes

No declarations of interest were received.

Apologies for absence were received from Councillors Brock, Thornton and Tidd.

Members welcomed Jennifer Norman, of Forvis Mazars, the Council’s external auditors.

RESOLVED –

That the Minutes of the meeting of the Standards and Audit Committee held on 21st November 2024 be approved as a correct record and be signed by the Chair.

The Head of the Internal Audit Consortium submitted a report for Members consideration. The report detailed progress against the 2024/25 Internal Audit Plan and provided assurance on the governance, risk and control processes in place in respect of the audits completed.

It was noted that since this committee had last met 6 reports had been issued,2 with Substantial assurance, 1 with Reasonable assurance and 3 with Limited assurance.

The Service Director – Leisure, Culture and Community Wellbeinggave a verbal update to Members on the progress made against their recommendations of the Outdoor Facilities Leisure Income Internal Audit Report. It was noted that many actions had already been completed and the team would be working towards meeting all outstanding recommendations by 31 March 2025.

The Development management and conservation managergave a verbal update to Members on the progress against the Planning Fees Income Internal Audit Report and how a proactive, comprehensive response had been implemented. It was reported that all recommendations apart from two had been implemented and it was detailed how the team would be working towards meeting these.

The Service Director – Corporate gave a verbal update to members on the progress against the Safeguarding Internal Audit Report. It was reported that immediate action was taken to resolve the issue identified and there are sound processes and controls in place going forward.

Members praised the work being undertaken by all involved.

The progress of the 2024/25 internal audit plan was shown at Appendix 5 of the officer’s report. It was reported that due to a turnover of staff, the whole plan is unlikely to be completed however it is currently anticipated that enough of the plan will be completed to enable an unlimited internal audit opinion to be provided at the end of the year.

*RESOLVED –

That the report be noted.

The Head of the Internal Audit Consortium presented information for members on the Global Internal Audit Standards, the CIPFA Application Note: Global Internal Audit Standards (GIAS) in the UK Public Sector Applicable from 1 April 2025 and the CIPFA Code of Practice for the Governance of Internal Audit (the Code).

In January 2024 the Institute of Internal Auditors (IIA) published the Global Internal Audit Standards, shown at Appendix 1 of the officer’s report. These are intended to guide the worldwide professional practice of internal auditing and serve as a basis for evaluating and elevating the quality of the internal audit function.

From 1^st April 2025 the GIAS will replace the Public Sector Internal Audit Standards (PSIAS). The Internal Audit Consortium is currently compliant with the PSIAS and whilst many of the principles of auditing are the same, work is ongoing to ensure full compliance with the GIAS.

The GIAS are organised into 5 domains:

·      Purpose of Internal Auditing

·      Ethics and Professionalism

·      Governing the Internal Audit Function

·      Managing the Internal Audit Function

·      Performing Internal Audit Services

The CIPFA Application note, shown at appendix 2 of the officer’s report, sets out the interpretations and requirements which need to be applied to the GIAS requirements, in order that these form a suitable basis for internal audit practice in the UK public sector.

CIPFA has developed the Code of Practice for the Governance of Internal Audit in Local Government, shown at appendix 3 of the officer’s report, to support authorities in establishing their internal audit arrangements and providing oversight and support for internal audit. The Code is aimed at those responsible for ensuring effective governance arrangements for internal audit so for Chesterfield Borough Council this is the Standards and Audit Committee.

The Head of the Internal Audit Consortium has undertaken a self-assessment against the Global Internal Audit Standards using the Institute of Internal Auditors self-assessment toolkit. Whilst the bulk of the Standards are already complied with, some areas for improvement have been identified to ensure full compliance and these were detailed at appendix 4 of the officer’s report.

RESOLVED –

That the report be noted.

The Head of Digital and Technology gave a verbal report updating the committee on the measures that had been put in place in regard to Network and cyber security controls. It was reported that the last Internal Audit report had returned with Substantial Assurance, evidencing the work that the team had done.

Members were also informed of the number and types of risks that the team were dealing with daily. It was noted that the Cyber Assessment Framework, which had been adapted for local government by the Ministry of Housing, Communities and Local Government, had been adopted by Chesterfield Borough Council.

Members wished to convey their thanks to the team for all their work.

RESOLVED –

That the report be noted.

The Service Director – Digital, HR and Customer Services gave a verbal update of the work that had been done since May 2024 when a Limited Assurance Report was received regarding Housing Rents. It was reported that the team was now fully staffed and receiving continual training to increase the resilience across the service area. It was also noted that a more streamlined policy would go live after the financial year end.

Members thanked the team for their work.

RESOLVED –

That the report be noted.

The Service Director – Finance submitted a report on the Statement of Accounts for 2022/23, the Management Letter of Representation and the External Auditor’s Audit Completion Report and the Annual Audit Report.

It was reported that the significant delays in the external audit of local authority accounts continues to be a well-known issue. Following consultations in February 2024, the Ministry of Housing, Communities and Local Government (MHCLG) issued a statement on 30^th July 2024 detailing backstop dates to 2027/28.

The backstop measures introduced are intended to clear the backlog of unaudited accounts up to and including 2023/24. In his statement the Minister recognises that the measures are likely to result in a number of ‘disclaimed’ or ‘modified’ audit opinions with auditors likely to ‘issue hundreds of ‘disclaimed’ audit opinions, and disclaimed opinions will likely continue for some bodies for a number of years’.

The legislation introduces five further backstop dates up to and including 2027/28. These dates are intended to allow full assurance to be rebuilt over several audit cycles.

The external auditor was required to ‘communicate audit matters to those charged with governance’, i.e. the Standards and Audit Committee, and a copy of the external auditor’s report was attached at Appendices B and C. Jennifer Norman of Forvis Mazars attended the meeting to present the External Auditor’s Report to ‘those charged with governance’.

The report concluded that as a result of the backstop arrangements there had been insufficient time to complete the audit procedures so as to obtain sufficient, appropriate evidence, and the effects of the resulting lack of assurance was pervasive to the financial statements as a whole. As a result, it was reported that a disclaimer of opinion would be issued on the Council’s financial statements for the year ended 31 March 2024.

It was noted that proactive steps had been taken to address the significant weaknesses identified in the 2022/23 Statement of Accounts and there is no evidence that the risk now exists.

RESOLVED –

1.   That the Committee approves the Statement of Accounts in respect of 2023/24.

2.   That the Committee receives the Audit Completion Report and the Annual Audit Report from Forvis Mazars as external auditors.

3.   That the Committee approves the Management Representation Letter.

The Service Director - Finance presented a report recommending for approval the Treasury Management Strategy Statement 2025/26, the Capital Strategy Report 2025/26, the Investment Strategy Statement for 2025/26 and the Minimum Reserve Provision (MRP) Policy for 2024/26.

*RESOLVED –

That it be recommended to Full Council that:

1.   The Treasury Management Strategy Statement for the financial year 2025/26 be approved.

2.   The Capital Strategy Report, including the Prudential Code Indicators, for the financial year 2025/26 be approved.

3.   The Investment Strategy Report for the financial year 2025/26 be approved.

4.   The Minimum Revenue Provision Policy for the financial year 2025/26 be approved.

The Head of Legal Services and Monitoring Officer presented a report for consideration of updates to the Constitutionpursuant to the Procurement Act 2023 coming into force on 24 February 2025.

 *RESOLVED –

That the report be approved with the changes to the Constitution proposed paragraph 4.8 of the officer’s report.